Post by : Shakul

Gold markets across Asia witnessed major changes this week after India sharply increased import duties on gold and silver, leading to record discounts in the Indian market while Chinese gold premiums remained firm due to strong investment demand.

According to market traders, gold dealers in India offered discounts of up to 207 dollars per ounce over official domestic prices. This marked a historic jump compared to the previous week when discounts were only around 15 dollars per ounce and some traders were even charging premiums. The sudden shift came after the Indian government increased import duties on gold and silver from 6 percent to 15 percent.

The higher import tax immediately affected demand across the country. Jewellery buyers and retailers stepped back from fresh purchases due to rising prices, while many investors began selling their gold holdings to secure profits. Traders in major markets including Hyderabad and Mumbai said customer activity slowed significantly after prices climbed sharply earlier in the week.

Domestic gold prices in India rose to nearly 164,500 rupees per 10 grams earlier this week before easing slightly on Friday. Market experts said the steep discounts appeared because demand almost disappeared while scrap gold supply in the market increased rapidly as investors sold existing holdings.

India, which is the world’s second-largest gold consumer after China, also tightened regulations on duty-free gold imports used for jewellery exports. The government introduced a limit of 100 kilograms per licence for such imports, adding further pressure on the bullion market and jewellery trade.

In contrast, gold demand in China remained strong. Chinese bullion dealers continued offering premiums between 15 and 20 dollars per ounce above international benchmark prices. Analysts said strong investment demand and industrial buying from sectors such as solar energy and electronics helped support prices in China.

Market experts noted that industrial stockpiling in China has increased significantly in recent months. They also stated that expectations of relaxed import restrictions in China may further strengthen market activity in the coming weeks. Analysts believe stronger Chinese demand may help balance weaker consumption from India in the global gold market.

Global gold prices meanwhile faced pressure this week as higher energy prices increased inflation concerns and strengthened expectations that interest rates could remain elevated for a longer period. Financial markets continue closely monitoring economic developments, geopolitical tensions and investor demand for safe-haven assets like gold.

#India News #Business News #China #Global Economy