Gold dealers in India and China offer discounts

Gold dealers in India and China are currently offering discounts on gold prices due to the continuous surge in prices. This trend has been ongoing for nine weeks in India, where dealers are anticipating a potential reduction in import duties in the upcoming budget. Similarly, China, another significant consumer of gold, is also witnessing a similar trend.

India, being the world's second-largest gold consumer, is facing a slowdown in demand as prices remain high, deterring buyers. The current gold prices in India stand at around 72,600 rupees per 10 grams, slightly lower than the record high of 74,442 rupees recorded in May. Dealers in India are exercising caution in making purchases before the budget announcement, as there are speculations about a possible duty cut.

The Indian government, under the leadership of Prime Minister Narendra Modi, is expected to unveil the budget in July. Dealers in India are currently offering discounts of up to $11 an ounce over official domestic prices, inclusive of import and sales levies. This marks an increase from the previous week's discount of $9.

The high gold prices have resulted in reduced retail demand across India, particularly in rural areas where farmers are engaged in crop sowing activities following timely rainfall. The early arrival of the annual monsoon rains in India, covering the entire country, has further impacted gold demand.

In China, dealers are charging premiums ranging from $11 to $24 per ounce over international spot prices, indicating a similar decline in demand due to high prices. Meanwhile, gold sales in Singapore and Hong Kong remain relatively stable, with silver bars and coins gaining more interest due to the elevated gold prices.

The current scenario in the gold market in India and China reflects a trend of discounts and reduced demand attributed to high gold prices. As dealers await the budget announcement in India, the market remains cautious about potential changes in import duties. The impact of high prices on retail demand, coupled with favorable weather conditions in India, has influenced the gold market dynamics. Similarly, China's market is also experiencing a slowdown in demand, with premiums being charged over international prices. Overall, the global gold market is witnessing fluctuations in demand and pricing, with silver emerging as an alternative investment option amidst the high gold prices.