Key Gold Retail Hubs Yet to Recover From Pandemic Woes

SEATTLE (Scrap Monster): The demand for physical bullion continued to remain subdued in key markets including China and India, as the markets are yet to completely recover from Covid-19 pandemic impacts. Incidentally, the cases are on the rise in India, which has just started opening its market after the prolonged lockdown period to contain the spread of the virus.

In India, gold was reportedly trading at a premium of $2 an ounce over official domestic prices. It must be noted that the premiums have dropped, compared to $3 an ounce during the prior week. The premiums are mainly on account of drastic decline in official gold imports during the past three months or so. For instance, the gold import volume recorded 86% year-on-decline in the month of June this year alone. The grey market supply of gold too had recorded sharp decline, mainly due to embargo on international flights, as part of pandemic restrictions.

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Meantime, gold in China traded at discounts of $25-$30 an ounce over global benchmark gold prices. The discounts had ranged between $20 and $25 an ounce during the prior week. According to analysts, the country is likely to return to premiums only by late August or early September.