Asia's Gold Market:Strong Demand in China and Increasing Purchases in India

Author: Christian Roberts - Photographer / Content Editor

Published: 6 Mar 2023

Last Updated: 6 Mar 2023


Gold is often regarded as a safe haven asset, and investors around the world are looking to capitalise on its perceived stability during uncertain times. As of late, physical gold prices have traded at a premium in India, while China has witnessed healthy demand and fresh imports in the region. In this article, we will delve into the current trends in the gold market and provide insights for those interested in investing in this precious metal.

Gold has been an enduring safe haven asset that investors around the world turn to during times of uncertainty. As of late, the global gold market has experienced an upswing, with India witnessing a surge in demand and China continuing to dominate the market. In this article, we will provide insights into the current trends in the gold market that wealthy investors can use to inform their investment decisions.

India Witnesses a Surge in Demand

India, the second-largest consumer of gold after China, has recently experienced a surge in demand. Reports suggest that dealers in India are charging a premium of up to $1 an ounce over official domestic prices. This surge in demand can be attributed to the recent drop in local gold prices, which has encouraged Indian investors to buy more gold. Additionally, banks and refiners have resumed gold imports, which signals a growing optimism in the Indian gold market.

China Continues to Dominate the Gold Market

China, the top consumer of gold globally, continues to dominate the gold market. Reports suggest that China has approved quotas for commercial banks to import gold, and gold imports have been steadily flowing into the China Free Trade Zone. This healthy demand for gold has resulted in premiums holding firm at around $25 to $30 an ounce over global benchmark spot prices. Wealthy investors in China are looking to diversify their holdings, and gold has emerged as a promising investment option.

Apart from India and China, other regions have shown stable premiums in gold prices. In Singapore, premiums ranged between $1.50 and $2.50 an ounce, while in Hong Kong, they were around $1.50 to $3.50. In Japan, gold traded flat and at a $0.5 premium against global rates, with decent selling interest despite quiet demand. Although demand was subdued, there was a notable interest in selling as the price of gold in Japan remained close to its historical high. As of Friday, the local gold prices in India were trading at approximately 55,800 rupees per 10 grams. This represents a significant decline from last month's record high of 58,847 rupees.

Key Takeaways for Investors

Investing in gold can be a lucrative opportunity for wealthy investors looking to diversify their portfolio. It is crucial to stay up to date on the latest market trends to make informed investment decisions. The surge in demand for gold in India and healthy demand in China signal optimism in the market. Investors should also consider factors such as local regulations, geopolitical tensions, and global economic conditions while investing in gold.

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