Business
Gold discounts widen in India as high prices weaken demand
Gold demand in India slows as record-high prices push buyers to wait, prompting dealers to increase discounts.
NEW DELHI, India, July 19: Gold demand in India remained subdued this week as prices hovered near record highs, causing buyers to hold back and dealers to increase discounts to attract customers. Elevated prices also dampened activity in other major Asian markets.
Indian dealers were offering discounts of up to $10 an ounce below official domestic prices — which include a 6% import duty and 3% sales tax — an increase from last week’s maximum discount of $8.
“Jewellery stores across the country are seeing fewer customers. People are reluctant to buy now, hoping prices will drop,” said a jeweller based in Kolkata.
Domestic gold prices traded around 97,500 rupees per 10 grams on Friday, down from an all-time high of 101,078 rupees reached last month.
Although discounts might have increased more sharply due to weak demand, supplies remain limited because imports have sharply declined, explained a bullion dealer from a private bank in Mumbai.
India’s gold imports in June dropped 40% year-on-year to 21 tons, marking the lowest monthly figure in over two years amid sluggish demand.
In China, the world’s largest gold consumer, dealers quoted discounts ranging from $5 below to $10 above spot rates, down from last week’s premiums of $10 to $25.
“In China, physical buying interest is low currently because of the summer holiday. Demand may pick up from October,” said Peter Fung, head of dealing at Wing Fung Precious Metals.
In Hong Kong, gold sold at $1 to $2 premiums, while in Singapore, prices ranged from parity with the global benchmark to a premium of up to $2.20.
In Japan, bullion traded between a $0.50 discount and a $1 premium.
Gold discounts widen in India as high prices weaken demand
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