LAST WEEK'S crash in world gold prices has seen a surge in demand from India and China – the world's top two gold-buying nations – with local gold bar prices moving sharply above the international "spot" benchmark.
Swiss bank and major bullion dealer UBS said Tuesday that its exports to India are at 5-year highs. Standard Chartered Bank puts its shipments to India some 20% above previous records, according to Bloomberg.
"People are stocking for weddings and that will last till July," India's Business Standard quotes Kumar Jain, vice-chair at the Mumbai Jewellers Association, who now says April's total bullion imports to India are likely to top 70 tonnes, twice the level of March.
The world's #1 consumer of gold, India has no domestic mine output. New Delhi has sought to curb gold bar imports since early 2012, hoping to reduce gold's impact on India's widening balance of trade deficit.
But despite higher import duties, "Imports have been phenomenal since April 15," says Daman Prakash Rathod at Chennai-based wholesaler MNC Bullion.
Indian gold bar premiums above the international "spot" price – typically quoted for delivery in London – have this week jumped to $10 per ounce, a two-year high according to local reporters in Mumbai.
Hong Kong premiums have meantime jumped to $3 per ounce, an 18-month high, as demand for gold bars shipped into mainland China has surged following last week's 10% price crash.
Sitting between the two, Singapore has seen gold bar premiums above London prices hit near 5-year highs at $3 per ounce, thanks to both Chinese and Indonesian import demand.
"Local demand has slowed but demand from mainland [Chinese] buyers continues to be strong as mainland prices are even higher," the South China Morning Post quotes Kwong Dak-shing, director of gold dealers Kaiser Financial Services in Hong Kong.
Meantime in Dubai – the middle eastern financial center handling much of India's gold imports – dealers report a four-fold jump in demand since the price crash.
Gold brokers Barjeel Geogit Securities point to the price crash coinciding with the marriage season in India's southern state of Kerala -- home to just 3% of India's 1.2 billion citizens, but source of one-fifth of its physical gold demand according to MineWeb's Shivom Seth.