Gold prices declined in early Asian trading as hopes for progress in Russia-Ukraine talks diminish safe-haven appeal of the precious metal, Dow Jones Newswires reported.
|GOL||GOL LINHAS AREAS INTELLIGENT||5.21||-0.35||-6.37%|
Russian President Putin noted there are “certain positive shifts” in negotiations with Ukraine, Oanda says.
While Putin’s comments are likely giving market participants hope that cease-fire talks are heading in the right direction, economic growth concerns are unlikely to go away anytime soon, hence gold’s pullback should be limited, Oanda adds.
METAL PRICES HIT RECORD HIGHS, COSTS OF CONSUMER GOODS TO RISE
Spot gold fell 0.8% to $ 1,972.78 per ounce, the report said.
Reuters reported Sunday night physical gold dealers in India were forced to offer the steepest discount in six years this week to lure customers put off by a jump in domestic prices, with some people in top Asian hubs selling their bullion to cash in on the rally.
Earlier this week, global benchmark spot gold prices rose to near an all-time high of $ 2,020.47 as investors sought refuge from uncertainties spurred by the Ukraine crisis.
Local gold prices in India, traditionally the biggest gold consumer after China, jumped to 55,558 rupees per 10 grams, not far from the all-time high of 56,191 rupees hit 2020.
The price surge hammered demand and prompted dealers to offer discounts as high as $ 77 an ounce over official domestic prices – including 10.75% import and 3% sales levies – versus $ 27 last week.
GOLD FALLS IN ASIAN TRADING AMID INVESTOR PROFIT TAKING
“Demand is less than 10% of the normal,” said Harshad Ajmera, a gold wholesaler in Kolkata.
A Mumbai-based bullion dealer with a private bank said some consumers are selling their old jewelry to take advantage of elevated prices.
In China, discounts widened to $ 2- $ 4 an ounce over global benchmark rates compared to last week’s range of a $ 0.8 premium to $ 2 discount.
Chinese demand is “clearly on its knees,” said independent analyst Ross Norman, amid “the speed and the move higher” in gold prices.
In Hong Kong, gold was sold at $ 3 discounts.
Although selling has slowed as prices retreated toward the end of the week, most buyers awaited a bigger dip, said Peter Fung, head of dealing at Wing Fung Precious Metals.
Singapore, meanwhile, saw premiums of $ 1-1.80 an ounce, versus last week’s $ 1.80- $ 2.50.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
“It’s been very busy at our retail store with gold climbing above $ 2,000 again this week,” said Vincent Tie, sales manager at dealer Silver Bullion, with buyers citing high inflation as their motivation to bank on gold.
– Reuters contributed to this report.