Indian festival fails to buoy gold demand
Gold demand in top-consumer China was subdued this week as investors awaited outcome of crucial trade negotiations with the United States, while purchases in India during a key festival were lower-than-usual because of higher prices.
India celebrated Dussehra festival on Tuesday, when buying gold is considered auspicious.
“Consumers were struggling to adjust (to) the higher prices. Jewellers across the country have reported nearly 50 percent drop in Dussehra sales from a year ago,” Anantha Padmanabhan, chairman of the All India Gem and Jewellery Domestic Council (GJC) told Reuters.
Gold futures were trading around 38,100 rupees per 10 grams on Friday after hitting a record high of 39,885 rupees last month. Gold prices have risen more than 21 percent so far in 2019.
Dealers offered discounts of up to $20 an ounce on official domestic prices this week, slightly down from a discount of $21 last week. The domestic price includes a 12.5 percent import tax and 3 percent sales tax.
“We were hoping (the) market will come to premium this week due to Dussehra and lower imports, but demand was very weak,” said a Mumbai-based dealer with a bullion importing private bank.
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