Asia Gold-High prices, COVID-19 spike dim lustre in top hubs

Asia Gold-High prices, COVID-19 spike dim lustre in top hubs

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Elevated domestic prices dimmed retail appetite for physical gold in India this week, while a resurgence in COVID-19 cases prompted dealers in China and Hong Kong to offer discounts.

Indian gold prices jumped to 55,558 rupees per 10 grams earlier this month, not far from the all-time high of 56,191 rupees hit in August 2020.

"Prices are very volatile. Consumers are hoping prices may not sustain at higher levels," said a Mumbai-based dealer with a private gold importing bank.

Dealers offered discounts of up to $45 an ounce over official domestic prices — inclusive of 10.75% import and 3% sales levies - versus last week's $77 discounts, a near six-year peak.

The flow of old jewellery and coins has moderated amid the price volatility, said a New-Delhi based bullion dealer.

In China, discounts widened to between $4 and $6 an ounce over global benchmark spot rates from $2 to $4 the previous week.

In Hong Kong, gold was sold at anywhere between on par with the benchmark rates to $4 discounts, versus $3 discounts last week.

Regional physical demand is patchy, given the COVID-19 situation in China and the massive discounts in India and there is no question that the physical demand in Europe and Asia that