Physical gold traders offered discounts for a fourth consecutive week as consumers hesitated to make purchases due to rising domestic prices, while top consumer China also saw subdued demand.
In India this week, dealers offered a discount of up to $9 per ounce from official domestic prices – including levies of 15% on imports and 3% on sales, up by compared to last week’s $5 discount.
“The market was doing quite well in the first half of October, but then the price hike came and put a damper on the work. Today we are seeing lower demand than usual,” said Amit Modak, CEO of jeweler PN. Gadgil and sons, in the city of Pune.
Local gold prices jumped this week to 61,539 rupees ($739.01) per 10 grams, not far from the all-time high of 61,845 rupees ($742.68) reached in May.
Jewelers have become pessimistic about demand during the upcoming Diwali festival due to rising prices and are reluctant to make purchases, said a Mumbai-based dealer working with a private bullion import bank.
High prices could dampen demand during the peak festival season and lead to the lowest buying volumes in three years, the World Gold Council (WGC) said on Tuesday.
In China, premiums to global spot prices were quoted between $25 and $40 an ounce, a figure that was little changed from last week.
“Despite various easing measures, such as controlling the rental of import quotas, gold imports remain sluggish. The problem lies in the fact that demand is not large enough to generate a higher premium “, said Bernard Sin, regional director of Greater China at MKS PAMP. , said.
In Japan, gold sold at a discount of $0.25 to a premium of $1, compared to a premium of $0.5 to $1 last week.
In Hong Kong, bars were sold at premiums of $1.5 to $2.5 per ounce and $1.50 to $2.50 in Singapore.
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