Gold dealers in India offered the biggest discount this week as Covid-19 restrictions continue to hamper consumption across the country. Low demand in local markets and a price correction overseas has opened the doors to the highest discount in almost 9 months.
“Bullion dealers offered hefty discounts since prices are correcting overseas and demand is weak in the local market,” said a Mumbai-based bullion dealer with a gold-importing bank told Reuters.
Gold dealers coughed up discounts of up to $12 an ounce, the highest since mid-September 2020, inclusive of 10.75% import and 3% sales levies. Marking an increase from the $10 discount offered last week, reported Reuters.
Dealers however complained that jewellers were not placing orders despite the discounts and were just inquiring as states gear up to ease lockdown restrictions.
“Jewellers were only making inquiries as a few state governments are planning to ease lockdown restrictions. But they weren’t placing orders,” said Reuters quoting a Mumbai-based bullion dealer with a gold-importing bank.
Gold dealers in China too offered huge discounts amounting to $20-$50 an ounce over international spot prices from premiums of $6-$7 earlier in the week, reported Reuters. Chinese gold dealers have been dealt a double blow of a resurgent Covid-19 wave and new restrictions.
Bernard Sin, regional director, Greater China at MKS, told Reuters that Guangzhou’s recent surge in Covid-19 cases caused a total lockdown and this has impacted all gold manufacturers.
Gold prices rebounded in the US on Friday after a two-week low after nonfarm payrolls did not rise as much as expected, leading US gold futures to settle up 1% at $1,892.
News source – Hindustan Times