 "Discounts soar to record high as gold price hits 3-year high")
Gold discounts in India soared to a record high this week, as prices in the world’s second-largest consumer of the commodity touched a near three-year high, hurting consumer demand for physical gold.
Buying elsewhere in Asia also remained subdued as the global spot benchmark rallied after Britain’s surprise vote to leave the European Union last month. Bullion gained nearly nine per cent due to the political and economic concerns arising since the Brexit vote. Gold prices touched their highest in over two years earlier this week.
Dealers in India were offering a discount of up to $100 per ounce to the global spot benchmark, up from last week’s $57. Gold prices in the country hit a peak of Rs 32,455 ($481.81) per 10 grams earlier this week, the highest level since September 2013.
Buying in rural areas, which account for about two-thirds of India’s gold demand, continued to remain weak since the arrival of the summer crop sowing season, dealers said.
“Despite a price rally investment demand is weak. People are not interested in gold since the (Indian) stock market is also moving higher,” said a Mumbai-based dealer with a bullion importing bank. Physical gold demand remained weak in top consumer China, with consumers staying away due to high prices, traders said. Prices in China were seen at a discount of $1-$2 per ounce, unchanged from last week.
Buying elsewhere in Asia also remained subdued as the global spot benchmark rallied after Britain’s surprise vote to leave the European Union last month. Bullion gained nearly nine per cent due to the political and economic concerns arising since the Brexit vote. Gold prices touched their highest in over two years earlier this week.
Dealers in India were offering a discount of up to $100 per ounce to the global spot benchmark, up from last week’s $57. Gold prices in the country hit a peak of Rs 32,455 ($481.81) per 10 grams earlier this week, the highest level since September 2013.
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“At this level no one wants to buy. Everyone is waiting for a correction,” said Bachhraj Bamalwa, director at All India Gems and Jewellery Trade Federation. “Buyers think this price level will not sustain. Dealers are offering nearly $100 discount, but still they couldn’t do much business.”
Buying in rural areas, which account for about two-thirds of India’s gold demand, continued to remain weak since the arrival of the summer crop sowing season, dealers said.
“Despite a price rally investment demand is weak. People are not interested in gold since the (Indian) stock market is also moving higher,” said a Mumbai-based dealer with a bullion importing bank. Physical gold demand remained weak in top consumer China, with consumers staying away due to high prices, traders said. Prices in China were seen at a discount of $1-$2 per ounce, unchanged from last week.