India gold discounts hit 8-month high as record prices curb demand
Discounts offered on gold in India touched a more than eight-month high this week as demand slumped after spot prices surged past record highs.
Indian dealers offered a discount of up to $41 an ounce over official domestic prices, up from up to $39 an ounce last week.
Domestic gold prices hit a record high of 89,796 rupees per 10 grams earlier this week and have risen over 15% so far this year.
"The price just keeps climbing with no break. Every week, it's hitting new highs. Customers are just sitting back, waiting for a dip," said a New Delhi-based bullion dealer.
India's gold imports are set to tumble 85% in February from a year-ago to their lowest in 20 years.
However, discounts are still rising due to very weak demand, said a Mumbai-based dealer with a bullion-importing bank.
In China, gold traded at a discount of $2-$16 under spot prices.
Domestic gold prices have fallen sharply to a discount to international price, reflecting a significant tapering in local demand, Ross Norman, an independent analyst, said.
China's gold consumption in 2024 slumped 9.58% on-year to 985.31 metric tons, data from the China Gold Association showed, as high gold prices curtailed jewellery demand. Purchases of gold jewellery, which account for half of the total, plunged 24.7% to 532.02 tons, according to the data.
However, Chinese institutional demand for gold ETFs remains buoyant, while the central bank continues to accumulate gold, albeit at modest reported levels, Norman said.
In Singapore, gold traded at a premium of $1.80-$2.50. Meanwhile, dealers in Hong Kong charged premiums between $0.50 and $2 per ounce .
People are hesitating to buy gold except for investment purposes, which is being driven by safe-haven demand, said Peter Fung, head of dealing at Wing Fung Precious Metals.
In Japan, bullion prices were sold between a premium of $1.0 and a discount of $5.5, a trader said.
(Reporting by Rahul Paswan in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Sonia Cheema)
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