BENGALURU Indian gold dealers offered the biggest discounts in 8-1/2 months this week as COVID-19-related restrictions stifled consumption, while top consumer China flipped to a discount for the first time since late January.

India’s official tally of coronavirus infections crossed 28 million, with more than 2,500 daily deaths.

“Bullion dealers offered hefty discounts since prices are correcting overseas and demand is weak in the local market,” said a Mumbai-based bullion dealer with a gold-importing bank.

Dealers offered discounts of up to $12 an ounce, the highest since mid-September 2020, over official domestic prices - inclusive of 10.75% import and 3% sales levies - versus $10 discounts last week.

“Jewellers were only making inquiries as a few state governments are planning to ease lockdown restrictions. But they weren’t placing orders,” said another Mumbai-based bullion dealer with a gold-importing bank.

A combination of resurgent COVID-19 cases and recent regulations pushed Chinese gold prices to a discount of as much as $20-$50 an ounce over international spot prices from premiums of $6-$7 earlier in the week, traders said.

Last week saw premiums of $7-$10.

China’s central bank on June 1 issued a revised draft anti-money laundering law, covering accounting firms and precious metal exchanges.

This follows a clamp-down on lenders selling investment products linked to commodities futures to mom-and-pop buyers.

Bernard Sin, regional director, Greater China at MKS, said discounts rose to as much as $50, possibly due to newly imposed regulations, and deeper discounts could be seen going forward.

“Guangzhou has seen a surge in COVID-19 cases, resulting in a complete lockdown, affecting all gold manufacturers,” Sin said.

Singapore premiums were little changed at $1.2-$1.7.

Brian Lan, managing director at dealer GoldSilver Central, said there was more selling from jewellers, pawnbrokers and retailers due to higher prices at the start of the week, although demand has since improved.