Home / Markets / Commodities /  Gold price discount in India jumps to highest in 6 years

Discount offered by gold dealers in India rose to highest in many years as a sharp jump in prices crimped demand, according to a report. Domestic gold prices had touched a high of 55,500 this week amid the Ukraine crisis, not far from the all-time high of 56,191 hit in August 2020. The price surge prompted dealers to offer discounts as high as $77 an ounce over official domestic prices - the highest in six years - against $27 last week, Reuters reported. 

Gold rates in India include 10.75% import duty and 3% GST. The report, citing a bullion dealer, said that some consumers are selling their old jewellery to take advantage of elevated prices.

The discounts are expected to come down as gold gave up some of the recent gains. On MCX, gold futures had settled at 52800 per 10 gram on Friday while silver at 70246 per kg. Silver had jumped to 73,000 earlier this week. 

In global markets, gold were off their recent highs when they fell to around  $1,980 per ounce on Friday. Prices touched $2,070.44 on Tuesday, just $5 short of an all-time high reached in August 2020. But analysts said that the Russia-Ukraine crisis will continue to support the prospect for higher precious metal prices but prices may remain choppy as market players may remain non-committal ahead of this week’s Fed meeting.

Meanwhile, data showed that India's gold imports, which have a bearing on the country's current account deficit (CAD), surged by about 73% to $45.1 billion during April-February this fiscal on account of higher demand, according to official data. The imports stood at$26.11 billion in April-February 2021.

In February 2022, however, imports of the precious metal dipped by 11.45 per cent to $4.7 billion, as per the data by the commerce ministry. India is the world's second-biggest gold consumer after China.  (With Agency Inputs)

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