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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Press Event

Press Event

Modi takes tea, but no questions, in first press event as PM.  Full Article 

Monetary Policy

Monetary Policy

Finance Minister Arun Jaitley favours interest rate cut - paper  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Reuters Poll

Reuters Poll

India's growth pace to pick up as reforms draw investment   Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Reuters India Mobile

Reuters India Mobile

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