Higher prices and custom duty dampened Indian demand in July

  • Indian gold imports reached just 37.7t in July 2019 – 49% lower than the same month last year?
  • The domestic gold price was 2.3% higher in July compared to June; 23% higher y-t-d
  • The custom duty on gold was unexpectedly raised by 2.5% in the Union Budget on 5th July
  • With elevated domestic gold prices and a higher custom duty, the discount in the local gold market reached a peak of US$28/oz in July
  • Volatile prices and weak physical demand encouraged healthy gold futures trading on MCX: volumes touched a high of 46.8t in July

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Chinese jewellery retailers go lower for growth

In recent years, expansion into tier three and four cities has been a major strategic focus for many Chinese jewellery retailers. Chow Tai Fook (CFT), a leading retailer based in Hong Kong, added 251 points of sales (POS) in lower tier cities in 2018 compared to only 50 in tier one cities. Lao Feng Xiang, another large jeweller with 3,521 POS domestically, also prioritised expansion into lower tier cities.

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Au(T+D)’s trading volume edged closer to new record in July

  • Chinese gold prices rose modestly in July?
  • Au(T+D)’s trading volume in July extended its June surge
  • The local gold premium saw a much lower volatility?
  • Imports registered another decline, dropping to 55t in July
  • Gold withdrawals from Shanghai Gold Exchange (SGE) experienced the first rise in four months?
  • The People’s Bank of China (PBoC) added another 10t to its gold reserves

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