Gold prices in India have dropped sharply in recent days in tandem with a dip in global rates. On MCX, prices of futures gold contracts fell 0.76% to 37,870 per 10 gram on Friday. After the latest drop, gold prices are now down about ₹2,100 per 10 gram, from last month’s record high of 39,885 per 10 gram. Silver prices on MCX dipped 0.44% to ₹45,222 per kg. In global markets, gold prices fell as much as 1.4% on Friday as US and China reached a partial trade accord. The British pound surged on optimism for a Brexit deal.
Spot gold fell 0.8% to $1,483. Gold is often used as a hedge against political and economic uncertainties.
Despite the recent dip in gold prices, many analysts remain positive. While the limited agreement between US and China may resolve some short-term issues, several of the thorniest disputes remain outstanding, they say. New US tariffs on Chinese goods scheduled for December haven’t yet been called off.
Back in India, the recent correction in prices has led to optimism that retail gold demand could pick up in the days leading to Diwali. Demand continues to remain sluggish due to still-high prices, Reuters reported, citing a Mumbai-based gold dealer.
Dealers still offered discounts on official domestic prices this week, news reports said, though they have fallen from last week’s levels. The domestic price includes a 12.5% import tax and 3% GST.
Many top retail jewellers including Tanishq, Kalyan Jewellers and Malabar Gold have come up with promotional offers to coincide with the festive season.
Gold prices in India are still up over 20% so far this year, hitting retail demand. Gold imports into India last month plunged 68% year-on-year in September to their lowest in over three years, Reuters reported, citing sources.
Another tranche of sovereign gold bonds will open for subscription later this month, October 21-25 with issuance date on October 30, ahead of Dhanteras and Diwali. The issue price will be fixed on the basis of price of gold of 999 purity for the last three working days of the week preceding the subscription period. PAN number of the applicant is mandatory. (With Agency Inputs)