Lockdown measures imposed to combat the spread of the coronavirus have greatly affected the retail demand for physical gold in leading Asian markets. Although there has been a consistent demand from investors looking for a safe haven, the closure of jewelry shops in many areas has led to a decline in retail sales.

China, being the largest gold consumer worldwide, witnessed dealers selling bullion at significant discounts of $50 per ounce below the benchmark spot prices. This shows a slight improvement compared to the previous week, where discounts reached a record high of $50-$70, the highest since 2014. Ronald Leung, the chief dealer at Lee Cheong Gold Dealers in Hong Kong, mentioned that although some shops have reopened, consumers are still hesitant to make high-end purchases like gold.

India, another major player in the gold market, also experienced a decline in physical trading due to the impact of the coronavirus. In anticipation of Akshaya Tritiya, the country’s biggest gold buying festival on April 26, jewelry showrooms remained closed. Harshad Ajmera, the proprietor of JJ Gold House in Kolkata, stated that unlike previous years, jewelers are not making pre-festival purchases. Many jewelers have turned to online sales, delivering the purchased items after the lockdown is lifted. However, retail buyers are not showing interest in online purchases due to higher prices and uncertainties surrounding delivery.

Hong Kong and Singapore saw consistent investment demand for gold, but retail buying remained low. Dealers in these regions reported accepting pre-orders to be fulfilled at a later date, with clients willing to pay higher premiums and settling for whatever inventory was available. Premiums ranged from $0.40 to $2.00 per ounce in Hong Kong, a slight decrease from the previous week’s range of $0.50 to $1.00. However, some dealers quoted premiums as high as $4.00. In Singapore, gold bars were sold with an average premium of about $1.50 to $5 per ounce.

Japan also experienced a decrease in gold market activity, with premiums ranging from $0.50 to $1.00 per ounce. Tanaka Kikinzoku, a leading gold retailer in Japan, closed all its stores in response to the pandemic.

Overall, the lockdown measures have significantly impacted the demand for physical gold in major Asian markets. While investors continue to seek the safety and stability of gold, retail buyers are hesitant to make purchases due to the closure of jewelry shops and uncertainties surrounding online purchases. It is expected that these challenges will persist in the gold market in these regions until the restrictions are lifted and consumer confidence is restored.

**Useful Links:**
1. CNBC: Coronavirus lockdown hits gold demand in Asia’s top consumer hubs
2. Bloomberg: Coronavirus Blitz Forces Jewelers in India to Shutter Online