New Delhi: Gold dealers in India continued to offer discounts for a fifth week even as they hoped for improved demand as the holidays approach. In India, gold discounts have jumped to $ 23 an ounce against official domestic prices, from $ 30 last week, Reuters reported. Gold prices in India include 12.5% import duty and 3% GST.
In the futures market, gold prices ended the week at ₹51720 per 10 grams, approximately ₹400 higher than the levels of the previous week. On the other hand, the money ended the week at around ₹68.002 per kg.
Gold prices in India have remained in a narrow range in recent weeks, after hitting a record high of ₹56,200 the first week of August. After correcting these levels, gold was left without direction.
Gold traders are hopeful that if prices remain stable, demand could improve in the coming weeks and jewelers could start building up inventory for the holiday season.
Rising coronavirus cases and bleak economic outlook have helped prop up gold at lower levels. US gold futures settled for the week at $ 1,957 an ounce on Friday. Analysts expect gold prices to remain volatile in the near term amid mixed trading between stocks and the US dollar.
Earlier this week, the US Federal Reserve announced it would keep interest rates near zero for a long time. Falling interest rates, which lower the opportunity cost of holding unproductive bullion, and widespread stimulus have helped gold gain over 28% this year as it is considered a hedge against inflation. In India, gold prices have risen by around 30% so far this year amid the depreciation of the rupee against the US dollar. India imports most of its gold requirements.
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