- Weekly average ask premiums for freshly minted gold kilobars rose sharply in Singapore and Bangkok amid President Trump's tariff threats.
- Bid (buy-back) prices for recirculated kilobars in Singapore and Bangkok fell to a new low today, indicating profit-taking activities.
- Discount on Shanghai gold widens on Thursday; SHAUPM jumps to new record high
- Gold sets multiple record-highs this week amid uncertainty from US-China tariff-related developments?
- For the week ending February 7, 2025, physical gold kilobar ask (sell) premiums averaged at US$2.30/oz, US$1.71/oz and US$1.99/oz for Singapore, Hong Kong and Bangkok respectively*
- Weekly average (Ask) premiums for newly minted gold kilobars surged by $0.58/oz (+33.7%) in Singapore and $0.44/oz (+28.4%) in Bangkok, despite record-high gold prices, as demand for physical bullion spiked amid fears that President Trump's tariff threats could trigger a global trade war. In contrast, premiums in Hong Kong dipped by $0.18/oz (-9.5%) due to the high prices.
- Bid (buy-back) prices for recirculated kilobars in Singapore and Bangkok fell to a new low discount against international prices on February 7, 2025, indicating profit-taking activity as traders likely offloaded gold holdings near record highs.
- LBMA PM prices for physical bullion rose from $2,826.10/oz on February 3 (Monday), to $2,838.95/oz on February 6, reflecting a $12.85/oz (+0.5%) gain. As of now, gold is trading at approximately $2,862/oz.
- Domestic gold prices in India surged past ?86,500/10g on February 7, reaching a record ?86,693/10g in Delhi. The rally is driven by President Trump’s tariff policies and anticipation of the RBI’s policy announcement later today. As of Thursday, domestic gold traded at a discount of ?803.32/10g, narrowing from ?1,326.47/10g on Monday. Meanwhile, the Indian Rupee rebounded from a recent historic low after the RBI cut the repo rate by 25 bps to 6.25%—its first reduction in nearly five years. However, the rupee remains vulnerable amid a broader decline in Asian currencies, prompting the RBI to intervene by selling U.S. dollars via state-run banks to curb losses.
- In Istanbul, gold demand showed signs of recovery despite high prices, with local premiums rising from US$7.41/oz on Monday to US$12.13/oz by Thursday. As of February 6, gold in Istanbul was trading at approximately US$2,873.33/oz. Meanwhile, the Turkish lira hit a record low against the dollar on Monday, with USD/TRY surpassing 36.00 for the first time. According to the Turkish Statistical Institute, inflation rose by 5.03% MoM in January, missing market expectations. While monthly inflation reached an 11-month high, annual inflation fell to its lowest level in 1.5 years, currently standing at 42.15%.
- While discounts on Shanghai gold narrowed slightly to -USD 12.50/oz on Thursday from -USD 16.62/oz on Wednesday, they have widened greatly compared to -USD 3.35/oz on January 27, before the Chinese New Year holiday (January 28 to February 4). This points to a pullback in local gold demand, as buyers likely scaled back purchases due to the sharp rise in domestic gold prices and the fading festive-driven demand following the end of Chinese New Year.?
- The Shanghai Gold Benchmark PM (SHAUPM) slipped to CNY 667.52/g on Friday after reaching a new record high of CNY 668.01/g on Thursday. The ~CNY 23/g increase in the benchmark on Thursday marked the steepest session-on-session rise since March 24, 2020. ?????
- USD/CNY prints ~7.2864 at writing, with the pair sitting near a two-week high despite a weaker dollar as stalled progress on US-China tariff negotiations weighed on the redback. ?On Wednesday, China announced retaliatory tariff measures, prompting President Trump to cancel his scheduled call between him and Chinese President Xi, with no new date set for discussions. ???
- Despite that, responses from both China and USA have been fairly muted. If a call between the two leaders follows a similar path to discussions with Canada and Mexico, it could lead to a temporary pause in tariffs from both sides, easing some pressure on the yuan.?
- Gold deals ~$12 firmer at ~$2,868/oz at writing, resuming its climb toward the February 5 record high, on track for a second consecutive weekly gain. The precious metal set multiple record highs this week, supported by a rise in haven demand as uncertainty around the trade war intensified given the fluid nature of tariff-related developments, though things have somewhat settled from the developments seen in the first half of this week.?
- Between Monday and Wednesday, gold gained a net ~$67 to close Wednesday higher at ~$2,867/oz, supported by a drop in the dollar which fell to one-week lows. ?The yellow metal also notched a new record high on Wednesday, peaking at ~$2882.31/oz. ???
- To summarize tariff-related developments from Monday to Wednesday, Trump imposed tariffs on Canada (25%), Mexico (25%) and China (10%) on February 1. The tariffs on Canada and Mexico however were later paused for a month following calls with leaders of both countries on February 3, reinforcing expectations Trump is using tariffs as a negotiating tool rather than committing to a trade war.
- Meanwhile, the 10% tariffs on China remains in force, with no date set for a phone call between President Trump and Chinese President Xi after the former cancelled their scheduled discussion on Wednesday, following China’s announcement of retaliatory tariffs on the same day although the measures were fairly modest (~$14 billion worth of US shipments out of the >$160 billion imported into China last year). ?
- Gold fell by ~$11 to ~$2,856/oz on Thursday, with the move lower likely driven by a retreat in haven demand following a muted response from China and US after Wednesday’s flurry of developments, including the former’s retaliation, adding to optimism that the worst-case scenario as some have feared regarding US-Sino trade relations may not materialize fully.?
- With fewer tariff-related headlines, focus has shifted back to the Fed’s rate cut trajectory in this year’s cycle, which remains uncertain due to the unknown impact of tariffs on inflation.
- Fedspeak on Thursday offered little clarity, with Dallas Fed Pres Logan (’26 voted) and Chicago Fed Pres Goolsbee (’27 voter) expressing slightly differing views on how far rates can be lowered, though labour data remains a key factor. Nonetheless, markets anticipate that Trump’s tariff policies may spur a return of inflation, potentially promoting the Fed to either slow its pace of rate cuts or even consider rate hikes.
- Reflecting the expectation that rates may stay higher for longer, Fed funds futures now price in ~80% odds for a 25bps rate cut to come by the June FOMC, down from the fully priced-in odds seen last Friday.?
- Looking ahead, US NFPs (BBG median +170k jobs) for January will headline matters today, with the data release expected to point to continued labour market strength.?
* KIS gold ask (sell) premiums reflect the average ask premiums over spot reported by market participants for each location.
To receive daily updates on gold price premiums for key Asian markets and view bid and ask premiums for each location, subscribe to the KIS Gold Service at?www.kallindex.com
Disclaimer: This market commentary is for informational purposes only and does not constitute financial advice. Use of the information contained in this commentary is at your sole risk and any content, material and/or data presented or otherwise obtained through your use of the information in this document is at your sole discretion and risk. You will be solely responsible for any damage to you personally or your company or organisation or business associated whatsoever which in anyway results from the use, reliance or application of such content material and/or information.
