Gold in India is sold at a discount even when its price is falling. In India, gold prices are down approximately 5,500 per 10 grams per month. The price slump has failed to spark a rebound in demand from retailers.
While India’s gold prices have dropped around 10 per cent from the highs of their last month, physical retail demand has remained less than average, forcing dealers to give discounts. Gold prices in India dropped in a row on Friday for the third day, settling at around 50,690 per 10 grams. Gold is down about 5,500 per 10 grams or about 10 per cent from 7 August highs of 56,200.
Indian gold and silver prices rose sharply on Friday (4th September 2020), in tandem with a global market rally. On MCX, gold futures in October rose 1 per cent to as much as 51.399 per 10 grams while silver prices soared to as much as 51.399 per cent. India’s gold prices saw major fluctuations on Thursday and Friday amid volatile global rates.
Dealers offered discounts of up to $40 an ounce over official domestic rates this week, the Reuters announced a five-month high eased from last week’s $43.Gold prices in India include import duty of 12.5 per cent and GST of 3 per cent. Retail demand for physical gold in India this week picked up just marginally on a decline in domestic prices as the coronavirus crisis shaped consumer sentiment.
Analysts claim gold prices are likely to stay supported at lower levels, amid the expectations for further fiscal stimulus measures and trade tensions between the US and China. Despite the recent price change, gold prices in India are rising about 30 per cent this year, driven by central banks’ easy monetary policy, safe-haven demand, and rupee depreciation.
US Federal Reserve Chairman Jerome Powell said Friday that while US August unemployment statistics were optimistic for August, the economy’s recovery from the coronavirus pandemic is a long way ahead and interest rates will remain low for a long time to come. Powell’s remarks came after the latest reports showed that the U.S. job market continued its turnaround in August for a fourth month, with the unemployment rate declining by nearly 2 percentage points to 8.4 per cent. The far better-than-expected increase in the unemployment rate spanned demographic classes while the 1.37 million job increases were broad-based across industries.
