Gold’s retail demand in India rose due to Akshaya Tritiya, dealers say

Chinese markets closed for Labour Day holiday from May 1-5

Premiums of $2-$2.50/oz charged in Singapore this week

By Rajendra Jadhav and Anushree Mukherjee

May 2 (Reuters) – Gold started trading in premium in India this week for the first time in five months as demand revived in the world’s second-biggest bullion consumer due to a key festival and as prices corrected sharply from last week’s record high.

Indian dealers started the week by offering a discount

up to $24 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, but by the end of the week, they were charging a $3 premium.

Last week, they were offering a discount of up to $80.

“Retail demand started picking up thanks to the Akshaya Tritiya festival and it got an extra boost as prices came down,” said a Mumbai-based dealer with a bullion importing bank.

Akshaya Tritiya, the second-biggest gold-buying festival in India after Dhanteras, was celebrated on Wednesday.

Domestic gold prices were trading around 92,800 ($1,106.22) rupees per 10 grams on the day after hitting a record high of 99,358 rupees last week.

“Many potential retail buyers were on the sidelines due to (the) price volatility and were waiting for a price correction. They would likely make purchases in the coming weeks if prices remain stable,” said a Chennai-based bullion dealer.

Spot gold was trading around $3,256.44 as of 0539 GMT after hitting a record high of $3,500.05 on April 22.

In top consumer China, dealers charged premiums of $34-$48 an ounce over the global benchmark spot price in the first half of the week, compared with premiums of $44-$50 last week.

Chinese markets are closed for the Labour Day holiday from May 1-5.

In Hong Kong, gold

was sold at par to a $2 premium, while dealers in Singapore

charged premiums in the $2-$2.50 range.

Gold’s demand increased as prices fell, especially as Akshaya Tritiya prompted Indian customers to buy, said Brian Lan, managing director at Singapore-based GoldSilver Central.

In Japan, bullion

was sold at a discount of $0.25 to a $0.50 premium.

($1 = 83.8890 Indian rupees) (Reporting by Anushree Mukherjee in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Sumana Nandy and Mrigank Dhaniwala)