Physical demand for gold has picked up during a seasonally strong period for consumption, says Barclays. “Demand had been rather lackluster in early September but prices falling below $1200/oz reinvigorated interest,” Barclays says. “Local premiums in India have risen to $12-15/oz from $7/oz, while premiums in China have almost doubled to $6/oz. China’s ministry of commerce reported that sales by some jewelry retailers doubled during the Golden Week holiday, buoyed by lower prices and local promotions. A broader indicator suggests interest has risen to levels last seen in spring last year — volume traded on the Shanghai Gold Exchange on a monthly rolling basis is at its highest since May 2013, while the 12-month rolling average is at its highest since April 2014. But, in India, local traders have said jewelry sales are mostly being driven by old pieces being traded in rather than incremental buying…Given that the Diwali holiday is next week, ahead of the wedding season, we expect demand to improve, potentially offsetting macro headwinds in the near term.”
