BENGALURU: Gold demand in India improved slightly this week as softer prices drew in jewellery buyers even as caution prevailed, while premiums in China eased.
Gold prices in India dropped to their lowest since April 2 at 146,444 rupees per 10 grams on Thursday, and are down 1.5percent for the week so far.
Demand improved as the recent price correction drew buyers back, particularly those for jewellery purchases, said Chanda Venkatesh, managing director at CapsGold, a bullion merchant based in the southern city of Hyderabad.
Dealers quoted discounts of up to USD35 an ounce over official domestic prices, inclusive of 15percent import and 3percent sales levies, down from last week’s discounts of up to USD87. While jewellers have started restocking, purchases remain measured as confidence in retail demand for the coming months is still weak, said a Mumbai-based bullion dealer with a private bank.
Last month, the South Asian country raised import tariffs on gold and silver to 15percent from 6percent as part of efforts to ease pressure on foreign exchange reserves from higher oil prices. India’s physically backed gold exchange-traded funds logged their first net monthly outflow in a year in May, as investors booked profits following a sharp rise in prices triggered by higher import duties.
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