Physical gold prices in India moved to a discount over official domestic rates for the first time this as covid-related restrictions impacted retail demand. Dealers were offering a discount of up to $2 an ounce this week over official domestic prices, Reuters reported, as compared to previous week’s premium of $2.
Physical gold prices in India moved to a discount
Gold prices in India include 10.75% import duty and 3% GST. “Almost every state government has put some kind of COVID-19 restrictions… jewellery stores are either closed or witnessing negligible footfalls,” said a Mumbai-based dealer told Reuters.
In this June quarter, India’s gold consumption is expected to falter due to lockdowns, the World Gold Council said this week. In contrast, in the March quarter, India’s gold demand had witnessed a growth of 37% to 140 tonnes, due to pent-up demand and softening of prices of the yellow metal, according to the World Gold Council (WGC).
MCX futures market
In the futures market, gold prices ended 0.13% higher at ₹46,785 per 10 gram on Friday, snapping a 6-day losing streak. Silver settled at ₹68,423 per kg. On April 21, gold rates on MCX had hit a 2-month high of ₹48,400 amid a rebound in global rates but thereafter fell sharply. But on a month-to-month basis bold is still up nearly ₹1,800 per 10 gram in India.
According to Neal Bhai Reports Investment Advisors, gold has support around the level of 46100 – 45880. It recommends buying on dips with a stop-loss of ₹45,500.
“For the upcoming sessions, MCX Gold future likely to continue its bullish momentum towards psychological level of ₹49,000. Traders are likely to go for buy-on-dips opportunity Rationale: The main trend is up according to the daily swing chart; however, momentum is trending lower,” it said.
(With Agency Inputs)