Physical gold discounts in India widened to their biggest in five months this week as an upsurge in local prices dampened purchases, while China and Singapore saw demand rise from investors looking to hedge against a global slowdown.
Dealers in India, which is also the world's second biggest bullion consumer, were offering a discount of $7 an ounce over official domestic prices, the highest since mid-Jan.
This compares to a discount of 50 cents offered last week. The domestic price includes a 10% import tax and 3% sales tax.
"Multiple factors are hitting demand. Prices are rising. Urban consumers are busy in the admission of their kids. Farmers are focusing on sowing of summer crops. Gold buying is not a priority," said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in Chennai.
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