By Rajendra Jadhav and Rahul Paswan
(Reuters) – Physical gold was sold at a discount in India for the first time in six weeks, as a weaker rupee drove up prices and in turn moderated demand, while top consumer China saw seasonally slow demand.
Domestic prices in India rose to 76,800 rupees per 10 grams on Friday after falling to 74,852 rupees earlier last week.
Jewellers were not making purchases as the rupee fell to a record low, making imports even more expensive, said a Mumbai-based dealer with a private bullion importing bank.
The rupee dropped to a lifetime low of 84.7575 against the U.S. dollar this week.
Indian dealers offered a discount of up to $2 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, down from last week’s premium of up to $3.
“Retail demand was pretty low this week. Wedding season is going on, but lots of buyers seem to be holding off, waiting for prices to drop,” said a New Delhi-based jeweller.
Weddings are a major driver of gold purchases in India.
Meanwhile, Chinese consumers remained cautiously pessimistic toward gold, said Hugo Pascal, a precious metals trader at InProved, adding that he does not see an increase in demand “as December tends to be a sluggish month, while volume starts to pick up in January.”
Dealers in China were offering discounts of between $11-$15 per ounce on international spot gold prices, compared with last week’s $19-$21 discount..
“This indicates ample supply and potentially weaker domestic demand. The high valuation of gold in Renminbi may also be contributing to this trend,” said Bernard Sin, regional director of Greater China at MKS PAMP.
Traders in Singapore sold gold at $1.20-$2.25 premiums, while in Hong Kong, gold was sold at $1.40-$2.50 premiums..
In Japan, gold prices were flat against local London prices, a trader said.
(Reporting by Rajendra Jadhav in Mumbai and Rahul Paswan in Bengaluru; additional reporting by Swati Verma; Editing by Varun H K)
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