4 days ago
Indian dealers offer steeper discounts as price rally dulls demand
Gold discounts in India widened this week to their highest levels in more than a month, as a rally in domestic prices to near-record highs weighed on demand, while elevated rates also dampened buying across other major Asian hubs.
Domestic gold prices were trading around 98,300 rupees per 10 grams on Friday, after rebounding from a low of 90,890 rupees last month and nearing the all-time high of 99,358 rupees.
by Taboola
by Taboola
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The spike in prices forced Indian dealers to offer discounts of up to $56 an ounce below official domestic prices, which include a 6% import duty and 3% sales tax, up from $31 last week.
"Prices have gone up, and that's really hit demand. Hardly anyone was buying this week," said Harshad Ajmera of wholesaler JJ Gold House in Kolkata.
Gold demand
in India typically remains subdued during the monsoon season, which began earlier than usual this year.
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Jewellers are not making purchases because the lean demand season has started, and they don't want to build high-cost inventory, said a Mumbai-based
bullion
dealer with a private bank.
Meanwhile, dealers in top gold consumer China charged premiums of $10-$14 an ounce over the global benchmark spot price. Last week, bullion changed hands at par to a $15 premium.
"Elevated gold prices appear to have negatively impacted Chinese demand, judging by weaker trading volume," said Hugo Pascal, a precious metals trader at InProved.
In Hong Kong, gold was sold at a premium of $0.30 to $1.30, while in Singapore gold traded between at-par prices and a $2.50 premium.
"We've seen some of our clients coming to take profit and also on the wholesale side, we've seen some selling because prices are high," said Brian Lan, managing director at Singapore-based GoldSilver Central.
In Japan, bullion traded anywhere between a discount of $0.5 and a $0.5 premium over spot prices.
