LONDON (Commodity Online): Demand for physical gold has been strong across the board this week. Demand from India has been solid despite the recent increase in gold import duties, said UBS in a research note.
“Indeed, demand from India yesterday (Wednesday) was the strongest we’ve seen this year and again is very decent so far today (Thursday),” UBS added.
Part of it could be stock drawdowns as the old tax rate applies on current supplies, but gold priced in rupees fell 2% on Wednesday, they noted.
“We think that a good portion of the flow actually reflects strength in underlying demand as well,” they said.
Coin sales out of Europe and the U.S. remain solid. How much strength gold has going forward remains to be seen as the Lunar New Year begins next week and will hit physical demand from many regions, particularly China.
“Hence if gold can end next week higher, it would be another positive sign,” UBS concluded.
