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Asia Gold Discounts in India Hit 8-Month High as Record Prices Weigh on Demand

Asia Gold Discounts in India Hit 8-Month High as Record Prices Weigh on Demand

The gold discounts in India reached their highest level in almost eight months this week, due to the record-high prices and customers staying away from other major hubs.

Jewelers are reporting fewer sales. The rising price of bullion has caused a significant drop in demand.

On Thursday, the domestic gold price reached a new record of 87.886 rupees for 10 grams.

This week, Indian dealers offered a discount Up to $39 per ounce, including import duties of 6% and sales taxes of 3%, compared to a discount from $10 to $21 the previous week.

A Mumbai-based dealer from a bullion import bank said, "Jewelers don't want to build high-cost inventories at the end the financial year as they are busy with closing accounts." India's fiscal year runs from April to March 31.

India's gold exports will drop by 85% from the previous year in February, and reach their lowest level in 20 years. The demand has been dampened due to record high bullion prices.

China, which is the largest gold consumer in the world, traded gold at a discount ranging from $1 to $18 over spot prices. Hong Kong dealers charged premiums from $1 to $2 per ounce. .

Standard Chartered analyst Suki cooper said in a report that "China's Market is alternating between a discount or a premium."

The physical market has given gold a weaker foundation... China's stock markets have slowed down amid high prices highlighting the macro-drivers."

Bullion was traded in Japan A trader stated that a discount of 3 dollars and a premium $0.5 is the difference between these two prices.

A Japanese trader said, "The market is choppy and volatile because of Trump's policies. It seems investors are waiting for the trend to be clear."

A trader in Singapore said that gold was traded at a discount of $0.50 to a premium of $3.

(source: Reuters)