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Indian dealers continued to offer discounts for the sixth week on gold though price cuts eased as rates fell sharply this week. Indian dealers offered discounts of up to $5 an ounce this week over official domestic prices, down from last week’s $23, Reuters reported, saying that a drop in prices saw a little interest return in the precious metal. Gold prices in India include 12.5% import duty and 3% GST.
Gold demand in India may pick up a little ahead of the festive season and the recent price drop could encourage jewellers to build up inventory, a dealer said. India is the second biggest gold consumer in the world.
In India, gold and silver prices tumbled this week to register their biggest weekly fall in many months. On MCX, gold futures settled at ₹49,666 per 10 gram while silver at ₹59018 per kg. On a weekly basis, gold prices fell ₹2,000 per 10 gram in India while silver tumbled ₹9,000 per kg.
In global markets, gold also registered big fall this week. Analysts attributed the fall to a resurgent US dollar as concern over the outlook for global economic growth bolstered the appeal of the world’s most liquid currency as a safe-haven.
Despite the sharp fall, many analysts say that gold may also find support at lower levels as geopolitical tensions remain while economic outlook also remains dim. Uncertainty over the US presidential elections may also support gold.
In India, gold has corrected from last month highs of 56200 to current price of 49500, while silver has corrected from around ₹80,000 to ₹59000.
“Both the metals still look very attractive given the macro backdrop and other fundamentals supporting them. Gold is a stable one, while silver is the volatile one – so choose what you want to invest into,” says Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services. “Buy in tranches for better entry levels.” (With Agency Inputs)
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