Customers began trickling into jewellery stores in India last week as domestic gold prices slipped, with dealers hoping for a further rebound in demand going into a busy festival season.

Indians celebrate the festivals of Dussehra in late October and Diwali and Dhanteras in November, when buying gold is considered auspicious.

India also further eased restrictions to combat the coronavirus pandemic, which has hammered consumer sentiment, even as infections soared.

“Slowly, demand has been improving. Retail buyers have started visiting jewellery stores,” said Harshad Ajmera, proprietor of wholesaler JJ Gold House in Kolkata.

Dealers offered discounts of $6 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, versus last week’s $5.

Local gold futures traded around Rs50,300 per 10 grammes, retreating from a record Rs56,191 hit in August.

Festivals and the wedding season could generate healthy demand if prices remain around current levels, said a Mumbai-based dealer with a bullion importing bank.

In China, gold was sold at $40-$45 an ounce discounts versus global spot prices, before markets closed on Wednesday for a week-long holiday.

“Demand has been weak as people were preparing for the holiday and travelling back to their home towns,” said Samson Li, Hong Kong-based precious metals analyst at Refinitiv GFMS. In Singapore, $0.80-$1.50 an ounce premiums were charged.

“We’ve seen a bit of buying and got enquiries from wealth and fund managers,” said Brian Lan, Managing Director at dealer GoldSilver Central.

Japanese premiums eased to $0.25-$0.50 from $0.50-$0.75 last week. Gold investment caught a lot of attention this summer, but it’s been quieter since prices retreated from record-highs, a Tokyo-based trader said.

Bangladesh could raise local gold prices to align with international markets.

“Demand has been picking up over the last one month, but very slowly,” Enamul Haque Khan, president of the Bangladesh Jewellers Association said.

Meanwhile, gold clung to the $1,900 level in choppy global trading on Friday, with gains capped by a firm dollar, but bullion remained headed for its biggest weekly rise in eight weeks as US President Donald Trump’s COVID-19 positive test hurt risk sentiment. Spot Gold eased 0.2% to $1,900.40 an ounce. Prices were set to rise 2.2% this week, heading for the biggest weekly percentage rise since early August.

US Gold futures settled down 0.5% at $1,907.60. “The election is 33 days away, there’s so much unknown - will it be a mild case, how will he react to it? So we have flight to safety keeping Gold afloat,” said Bob Haberkorn, senior market strategist at RJO Futures. “Traders seem cautious because they’re concerned about equity markets selling off.”

Gold had risen to an over one-week high after Trump said in a tweet that he and his wife Melania had tested positive for the coronavirus, hammering Wall Street. However the White House reassured Americans that the President was “not incapacitated”.

Investors also took stock of the last monthly employment report before the Nov. 3 presidential election, which showed U.S. job growth slowed more than expected in September.

“Gold is likely to remain range-bound in the short term. The market will wait through the weekend and look for news,” said Tai Wong, head of base and precious metals derivatives trading at BMO. The dollar too benefited from safe-haven inflows, limiting Gold’s upside. Focus was also on an elusive US coronavirus relief aid deal.

Gold can move back up “if the US congress passes a stimulus bill, that seems to be what this market is hanging on to for now,” Haberkorn added. Elsewhere, silver eased 0.6% to $23.73 an ounce, platinum dropped 2% to $878.47 and palladium was down 0.1% to $2,313.68.

Separately, gold miner Centamin’s production outlook hit by delays at Sukari mine. Centamin on Friday forecast a fall in annual production as the Gold miner delayed some open-pit mining operations at its key Sukari mine in Egypt for safety reasons.

Centamin said it detected a movement in Sukari’s open pit Stage 4 West wall using a radar system and decided to immediately defer the open-pit mining operations in this zone, which were scheduled to start during the fourth quarter of 2020. Shares of the FTSE midcap company were down 18% at 165 pence.

The company said the measures to stabilise movement in the affected area have already been implemented, while the open-pit mining at Stage 4 North and Stage 5 North will continue.

Reuters