India gold discount widens to max in seven months; higher prices hurt demand

Mumbai-India (July 28)  Gold prices in India this week recorded the biggest discount in seven months as a rebound in prices curtailed retail demand, while lower premiums in other Asian centres failed to lure customers amid seasonal slowdown.

"In the local market, prices have risen due to the GST (Goods and Services Tax) and a rally in overseas prices. Consumers are not comfortable with the price rise," said Mukesh Kothari, director at bullion dealer RiddiSiddhi Bullions in Mumbai.

As part of a new nationwide sales tax regime that kicked in on July 1, the GST on gold has jumped to 3 percent from 1.2 percent previously.

"Usually demand remains weak in July. This year, the price rise has added further pressure," Kothari said.

Dealers in India were offering a discount of up to $4 an ounce this week over official domestic prices, compared to a discount of $1 last week. The domestic price includes a 10 percent

 

Reuters