Indian buyers snap up gold; April imports seen rising

SINGAPORE/MUMBAI Tue Apr 23, 2013 2:09pm IST

1 of 2. A customer tries on a gold necklace inside a jewellery showroom in Hyderabad April 11, 2012.

Credit: Reuters/Krishnendu Halder/Files

Related Topics

SINGAPORE/MUMBAI (Reuters) - Premiums for gold bars soared to multi-year highs in Asia on Tuesday after a spate of physical buying led to supply constraints, with dealers in top consumer India expecting a surge in imports this month.

Purchases of gold bars, coins, nuggets and other products picked up pace after a brutal selloff drove down spot gold prices to their weakest in more than two years at around $1,321 last week. A rise of more than $100 since then has failed to dent buyers' appetite for the metal.

"People are stocking for weddings and they will last till July," Kumar Jain, vice-chairman of Mumbai Jewellers Association. "Imports would had been more if supply was not an issue," said Jain, who expects shipments to India to double to 70 tonnes in April from a month ago.

In Mumbai, premiums for gold bars jumped to their highest in two years at $10 an ounce to the spot London prices due to rising demand. Gold jewellery forms an essential part of gifts at Indian weddings and festivals.

"Imports have been phenomenal since April 15. Banks are getting the lion's share in this profit," said Daman Prakash Rathod, director with MNC Bullion, a wholesaler in the country's southern city of Chennai.

In other parts of Asia, premiums for gold bars rallied to their highest since late 2008 in Singapore and touched an 18-month peak in Hong Kong.

"I think we can say there's no immediate gold coming into Hong Kong for the time being," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

"If you have time to wait, maybe they can deliver it to you in one or two weeks."

Hong Kong dealers were charging gold bars at premiums of $3 an ounce to the spot London prices, their highest since October 2011. The former British colony is the centre for bullion trading in East Asia and China's main source for gold imports..

Gold bars were quoted as high as $3 an ounce in Singapore -- a level last seen in October 2008, with dealers witnessing steady buying interest from local buyers, Indonesia as well as India.

Singapore and Hong Kong dealers get their supply from Japan and Europe, where suppliers were also struggling to cope with demand from Asia.

But in Tokyo, premiums slipped to 50 to 75 cents an ounce to the spot London prices from $1 last week as buyers paused for breath.

"The market has come down a little bit. Last week, there was a huge demand for gold from the general public, but we don't see much this week," a dealer in Tokyo said.

Gold, which has dropped about 15 percent this year, has been caught in a tug-of-war between physical buyers seeking bargains and wary investors cutting exposure to it on worries about central bank sales and prospects of easing inflation.

Investors were still licking their wounds after spot gold posted its biggest-ever daily loss in dollar terms last Monday, taking many ardent gold investors and bulls by surprise. (Editing by Himani Sarkar)

FILED UNDER:

REUTERS SHOWCASE

2015: India Outlook

2015: India Outlook

India in 2014: A dream run for markets.  Full Article 

Funding Woes

Funding Woes

Co-founder of SpiceJet seeks time to finalise rescue.  Full Article 

Flying Back on Course

Flying Back on Course

The inside story of the new Airbus A350 jet.  Full Article 

Oil Price Forecast

Oil Price Forecast

Oil prices likely to rebound in second half of 2015: poll  Full Article 

Deal Talk

Deal Talk

China's private sector suitors to drive Asian M&A deals in 2015.  Full Article 

Property Tycoon

Property Tycoon

Wang Jianlin, China's property tycoon, finds golden path to billions.  Full Article 

Cybersecurity

Cybersecurity

Internet outage seen in N. Korea amid U.S. hacking dispute.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage