MTECHTIPS;-Gold-India discounts widest in 10 months, China premiums

MTECHTIPS;-Gold-India discounts widest in 10 months, China premiums dip

MTECHTIPS-Gold discounts in India widened to their highest in over 10 months and premiums in other major Asian centres edged lower on the back of sluggish demand across markets due to rallying global prices. In India, dealers were offering bullion imported from South Korea without paying custom duty at lower prices prompting higher than usual imports from the country, traders said. “Due to the free trade agreement signed with South Korea, importers don’t need to pay import duty for gold imported from that country. That’s why importers could offer huge discount,” said proprietor of Mumbai-based wholesaler Dealers in India were offering a discount of up to $11 an ounce this week over official domestic prices, the highest since Sept. 24, 2016. Last week they were offering a discount of $4. The domestic price includes a 10 percent import tax. “Retail demand is subdued. It will remain weak in the first half of August unless prices correct sharply,” said a Mumbai-based dealer with a private bank. India’s gold imports will likely drop in the second-half of the year from the first six months after jewellers rushed to stock up ahead of new taxes introduced on July 1, the World Gold Council (WGC) said on Thursday. demand is expected to remain subdued in India for a few weeks as “consumers who have recently purchased are unlikely to do so again in the short term”, the WGC said.

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