The fall in demand from jewelers, mainly on account of rebound in domestic prices, resulted in Indian gold slipping to discount for the first time in almost a month. Incidentally, domestic gold prices in the country recorded nearly 3% up move during the past week, aided by higher international gold prices and depreciating local currency. As per reports, gold traded at a discount of up to $1.5 per Oz over official prices, as compared with a premium of $2 per Oz during the prior week.
The gold demand continued to remain moderate, despite wedding season. The high prices seem to drive away consumers from investing in the yellow metal. Also, gold has lost its sheen as preferred investment, with more money being pumped into other asset classes including stock markets and bank fixed deposits. Lack of supporting fundamentals tends to repel fresh gold investments, noted market participants.
As per World Gold Council (WGC) estimates, the wedding season demand may continue, but volume of purchases are likely to see huge decline. The demand for gold during Oct-Dec ’18 quarter is likely to remain higher than the sequential quarterly demand of 183.2 tonnes. However, it may not surpass the year-ago Oct-Dec quarterly demand of 240 tonnes. The whole year gold demand is estimated to total around 700 tonnes in 2018, WGC noted.
Meantime, China and Hong Kong reported healthy gold demand, with dealers seen willing to pay hefty premiums.
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