Latest News

ASIA GOLD - India discounts reach record highs on the import duty hike, while China premiums remain firm

This week, gold discounts in India reached a new record as a sharp increase in import duties slowed demand and triggered investor sales. Meanwhile, Chinese premiums remained firm due to investment demand.

Dealers in India quoted discounts This week, you can save up to $207 per ounce on official domestic prices, including 15% import duties and 3% sales taxes.

A jeweller in Hyderabad said that the'sudden rise in price' prompted investors and jewellers to sell while retail buyers and jewellers stayed out of it.

India increased import duties on gold and Silver to 15% this week from 6%. India, the world's second largest consumer of gold, also tightened its rules on duty-free imports of gold for jewellery exports. Imports are limited to 100?kilograms.

On Friday, gold prices in India traded at around 160,500 rupees for 10 grams, up from 164,497 earlier in the week. This was the highest price in over two months.

A Mumbai-based gold dealer said that the discounts on gold have risen to an unusually high level as demand has virtually disappeared and scrap supply has increased.

"China's stronger demand will likely counter India’s weaker demand following the policy changes of India," ANZ stated in a report.

Bullion was traded at a premium in China, the world's largest consumer. The premium of $15 to 20 per ounce is in line with the $14 to $20 that was seen last week.

Bernard Sin, Regional?Director of Greater China at MKS PAMP, stated that premiums were stable this week, due to the resilient investment demand, and aggressive industrial purchasing.

Import restrictions are still a major constraint. However, a gradual easing is expected. Solar and electronics firms are particularly aggressive in their industrial stockpiling, which is exacerbated by the elimination of VAT (value added tax) export rebates," said he.

The spot gold price has fallen 2.8% in the last week as rising energy prices fueled inflation fears and reinforced expectations for higher interest rates.

In Hong Kong, gold In Japan, the premiums are $2. Gold was sold for $0.50 off. In Singapore Gold was sold with premiums ranging from $1 to $3.30.

(source: Reuters)