Contango ORE stock plummets as costs rise at Manh Choh mine
The cost rise relates to an overall reduction in the amount of ore being transported annually by approximately 20%.
MUMBAI/BENGALURU — Gold demand in India improved this week due to a fall in local prices, while some investors in other major Asian centres sold the metal back to make use of relatively higher prices while delaying purchases on expectations of a further correction.
“Jewellers are buying in a phased manner as prices have corrected. They are expecting an improvement in retail demand in coming weeks,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.
“Jewellers are buying in a phased manner as prices have corrected. They are expecting an improvement in retail demand in coming weeks”— JJ Gold House
In the spot market, gold was trading around 33,800 rupees per 10 grams on Friday, after rising to 34,900 rupees last week.
Dealers in India were offering a discount of up to $2 an ounce over official domestic prices this week, down from last week’s $6. The domestic price includes a 10 percent import tax.
“As of now prices are correcting, some jewellers are expecting a further fall in prices. They are not covering their full requirement,” said a Mumbai-based dealer with a bullion importing bank.
In China, the world’s biggest gold consumer, premiums slightly firmed to $8-$11 from $7-$10 an ounce in the previous week. But, demand remained relatively low, traders said.
“Higher premiums may have something to do with the weak import volume in January,” said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS, adding that gold imports in China were weaker than expected in January despite higher demand.
In Singapore, premiums were unchanged from last week, at 50-80 cents over the global benchmark, while those in Hong Kong were steady, in a range of 50 cents to $1.30 an ounce.
“New demand has been slow, but we are getting a lot of metals back from clients,” said a Singapore-based bullion dealer.
Spot gold prices have fallen about 1.5 percent this week and are on course for their worst week since early November. Bullion prices, however, are up about 2 percent so far this year and holding above $1,300 per ounce on worries over a slowdown in global economic growth and hopes of a mostly dovish U.S. Federal Reserve.
“Buyers are expecting a near-term correction in prices which may present a better entry point,” said Gregor Gregersen, CEO of Singapore retailer Silver Bullion Pte Ltd.
“Suppliers are also reporting a quiet market. Refiners are buying more scrap gold but are not seeing higher sales of bullion bars.”
In Japan, the metal was sold at a discount of about 50 cents to the global benchmark price, compared with 75 cents last week, a Tokyo-based trader said, adding that selling from customers continued due to higher gold prices in Japanese yen terms.
Gold priced in yen rose to its highest level in more than a year last week.
(Reporting by Nallur Sethuraman in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Subhranshu Sahu)
