The jury was out this week as to the extent of physical gold demand across the globe, with some pointing to premiums against the dollar benchmark price, while others suggested a much more neutral picture, with regional prices flat to dollar spot.
In a research note published out of New York late Thursday HSBC senior analyst James Steel wrote: "Emerging market demand is supportive of gold, as indicated by positive premiums in major emerging market bullion centers. But this may not be enough to promote a rally."
However, Platts Gold Premium 995 India was assessed up only 50 cents on day Friday, from flat Thursday, at $0.50/troy oz against the dollar price.
"[The] market is dull, [there's] not much happening," said one refiner from Delhi.
Still a banking source in Switzerland said he was seeing orders being filled.
"I wouldn't say premiums are flat. There has been strong demand for physical, especially for the 995 kilobars," he said.
He said that he was seeing London good delivery bars, the benchmark for refiners accredited by the London Bullion Market Association, at a premium of $6/tr oz delivery into India. Location in the country wasn't specified.
Standard Chartered analyst Suki Cooper said the physical market has so far responded well to price dips below $1,100/oz.
"We expect prices to average $1,095/oz in Q1 2016, but to close the year at a quarterly average of $1,110/oz. We view the expected lows at the end of this year and Q1 2016 as buying opportunities in gold," noted Cooper.
In China, the calculation of the Shanghai Gold Exchange close against the London open showed a premium of around $4/tr oz according to one senior banking source in Hong Kong, a fund source in London agreed.
The banking source said that the premium in Hong Kong was around $1/tr oz.
A logistics source last put the premium in Hong Kong around $1.50/tr oz.
A trader in Japan said that the market was in a 50 cents discount to the dollar price.
"There's not much going on here these days. Ahead of the holiday season, I think [that the] market can not move much [in either direction] but feel gold [could] test $1,000 before going higher," he added.
In agreement Allocated Bullion Solutions, a tech firm catering for physical gold markets, said recently that it sees the dollar gold price trending lower towards $1,000/tr oz, and possibly as low as $950/tr oz.
"While the physical gold market may play a larger role in pricing in the long-run, we have seen limited support in Q3," Seamus Donoghue, ABS CEO said.
He noted scope for the gold price to trend downwards towards $950/tr oz over the coming 12-months, with a strengthening dollar being the key headwind.
Bullion bank Scotia said in recent research that, "we expect physical demand to pick up in 2016 and firmer prices should also instill confidence. We expect prices to continue to trade either side of $1,100."
The gold price hit a 2015, and indeed five-year low, of around $1,045/tr oz December 3 according to one dealer.
The LBMA Gold Price settled Friday morning at $1,067.20/tr oz, having started the year at $1,184.25/tr oz.
