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Gold dealers in India this week offered the biggest discounts in nearly nine months as retail demand continued to remain muted due to coronavirus restrictions. A discount of up to $12 an ounce was offered by gold dealers over official prices, versus $10 discounts last week, according to news agency Reuters. This is the highest level of discount since mid-September.

Gold rates in India include 10.75% import duty and 3% GST. But with many states announcing unlocking process in a phased manner, retail demand is expected to pick up in India.

On MCX, gold futures settled near 49,000 on Friday after a volatile week. In global markets, the precious metal rebounded from a two-week low to $1,889 on Friday after US nonfarm payrolls did not rise as much as expected. This helped ease concerns that the Federal Reserve will pull back stimulus.

Data released on Friday showed nonfarm payrolls in US increased by 559,000 last month versus analysts' expectations of 650,000. The dollar index weakened 0.41% to 90.127, making gold more affordable for holders of other currencies.

The US benchmark 10-year Treasury yields also moved lower to 1.557%. Gold prices have been volatile over the past one month on concerns that faster economic growth would spur inflation that leads governments and central banks to withdraw support. Gold is often viewed as a hedge against inflation.

"Weighing on price is concern about Indian consumer demand amid persisting virus related restrictions. However, supporting price is persisting virus concerns in some parts of the world, increased geopolitical tensions and general loose monetary policy stance of major central banks," Kotak Securities said in a note.

Analysts expect gold to trade in the $1,855 and $1,920 range in the near term. (With Agency Inputs)

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