Mumbai: Gold markets in Asia showed mixed trends this week as premiums in India dropped sharply while demand in China remained strong ahead of the lunar new year.
In India, gold premiums more than halved after touching their highest level in over ten years. Dealers said premiums fell to around seventy dollars an ounce from earlier levels above one hundred and fifty dollars. The drop came as buyers turned cautious following sharp swings in prices and continued uncertainty in the market.
Domestic gold prices had recently hit record highs before showing signs of correction. This price volatility discouraged many retail buyers, especially those looking to purchase jewellery. Traders said demand remained weak even after the government decided not to change gold import duties in the latest budget, a move that some buyers had been closely watching.
In contrast, gold demand in China stayed firm as the lunar new year approaches, a period that traditionally sees higher gold buying. Dealers reported premiums of about thirty five dollars an ounce, supported mainly by strong interest in gold bars and coins.
Market participants said Chinese consumers are increasingly buying gold as a safe investment rather than for jewellery. This trend has been supported by continued purchases by the country’s central bank, which has been steadily adding to its gold reserves for more than a year.
Analysts say the differing trends highlight how buyers in the two biggest gold consuming nations are reacting differently to global price movements. While high prices and uncertainty have slowed Indian demand, safe haven buying and festive season demand are helping support the market in China.
Globally, gold prices remain volatile, driven by economic uncertainty and expectations around interest rates. Traders expect physical demand to improve if prices stabilise further in the coming weeks.