Home / Markets / Commodities /  Gold price discount in India increases to 8-month high

Gold dealers in India offered steep discounts this week on the precious metal as most jewellery stores remained shut due to COVID-19 related lockdowns. Physical gold demand in India remained negligible. Dealers offered discounts of up to $10 an ounce over official domestic prices, the highest since mid-September 2020, news agency Reuters reported. Gold prices in India include 10.75% import and 3% GST.

However, with a few states gradually easing restrictions from next month gold demand may pick up, say dealers.

India today reported 173,790 new covid cases in the past 24 hours, its lowest daily rise in 45 days, according to Health Ministry data.

On Friday, gold futures on MCX settled above 48600 per 10 grams, having risen over 49,000 earlier this week. Silver futures closed lower at 71530 per kg.

In India, gold has rebounded from 44,000 levels, hit in March this year, tracking an uptick in global prices. On Friday, global rates rose above the key $1,900 level as new data strengthened concerns about surging US inflation.

A U.S. Commerce Department report showed that consumer prices accelerated 3.1% in the year to April, blowing past the Federal Reserve's 2% target and posting its largest annual gain since 1992. This boosted gold's appeal as a hedge against inflation.

Gold has been on an up move for last few weeks and in international markets is up over 7% this month.

Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services, says: “The yellow metal has continued to show strength and the safe-haven demand will remain intact in general. Further upside is possible if gold prices hold on to 49,000 areas for few sessions. Else a correction towards 48000/47500 should be seen." (With Agency Inputs)

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