Dealers offered higher discounts on gold this week in India as compared to the previous week as demand continued to remain weak in the country amid soaring prices. Discounts rose to about $22 an ounce over official prices from $18 last week, Reuters reported. Domestic prices in India include 12.5% import duty and 3% GST. The country imports most of its gold requirement. Jewellers said that even as stores have resumed operations, retail demand remains weak due to higher prices and coronavirus crisis.
In India, gold futures hit a record of ₹48,982 per 10 gram on Wednesday, before ending the week at ₹48,050.
Despite weak jewellery demand in many parts of the world due to the coronavirus crisis and soaring prices, spot gold in global markets has risen 17% in 2020, closing out the second quarter with the largest rally in more than four years.
Analysts say that demand from gold ETFs has surged as worries over the economic outlook, negative real rates and currency debasement after massive global stimulus measures drove haven-seeking investors into gold.
Total holdings of physical gold in ETFs have risen by more than 600 tons this year, according to data compiled by Bloomberg.
Global spot gold prices hit a near eight-year peak of $1,788.96 this week.
India's gold imports plunged 86% year-on-year in June due to record high prices, Reuters reported citing sources.
(With Agency Inputs)