Price bump puts off buyers in India, China

A spike in domestic prices put off most physical gold consumers in India this week and prompted dealers to offer discounts for the first time in about a month, with higher rates playing spoilsport in China as well, reports Reuters.
Indian prices scaled a peak since Aug 12 at 52,385 rupees per 10 grams on Friday.
"The quick price rise has surprised buyers. They have taken a pause," said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.
Dealers offered discounts of $4.0 an ounce over official domestic prices -- inclusive of 15 per cent import and 3.0 per cent sales levies -- versus last week's $3.0 premiums.
Footfall at jewellery stores was low this week, prompting jewellers to curtail buying ahead of the upcoming wedding season, said a Mumbai-based bullion dealer with a private bank.
In top consumer China, premiums eased to $12-$30 an ounce over benchmark spot prices, from last week's $25-$35.
Premiums have eased amid higher prices, said Peter Fung, head of dealing, Wing Fung Precious Metals.
But overall, Chinese premiums have remained elevated for the past couple of months, sometimes as high as $45, buoyed by steady demand and lower supply.
There's no news of new import quotas being issued, but we heard of some applying to renew expired or unused quotas, said Bernard Sin, regional director, Greater China at MKS PAMP.
China's central bank controls how much gold enters the country via quotas to commercial banks.