Gold dealers in India continued to offer discounts for a fifth week even as they hope for an improvement in demand as the festive season approaches. In India, discounts on gold eased to $23 an ounce over official domestic prices, from last week’s $30, Reuters reported. Gold prices in India include 12.5% import duty and 3% GST.
In the futures market, gold prices ended the week at ₹51,720 per 10 gram, about ₹400 higher as compared to the previous week’s levels. On the other hand, silver ended the week at about ₹68,002 per kg.
Gold prices in India have remained in a narrow range over the past few weeks, after hitting a record high of ₹56,200 in the first week of August. After correcting from those levels, gold has remained directionless.
Gold dealers hope that if prices remain stable, demand could improve in the coming weeks and jewellers could start building inventory for the festive season.
Rising coronavirus cases and a dim economic outlook have helped support gold at lower levels. US gold futures settled the week at $1,957 an ounce on Friday. Analysts expect gold prices to remain choppy in near term amid mixed trade in equities and US dollar.
Earlier this week, the US Federal Reserve signalled to keep interest rates near zero for a long time. Lower interest rates, which reduce the opportunity cost of holding non-yielding bullion, and widespread stimulus measures have helped gold gain over 28% this year as it is seen as a hedge against inflation. In India, gold prices are up about 30% so far this year amid the rupee’s depreciation against the US dollar. India imports most of its gold requirement. (With Agency Inputs)
Read More: Gold in India sold at a discount even as prices fall ₹4,500 from highs