Gold discounts in India surge to $41 per ounce as record prices dampen demand and imports fall sharply
The value of gold discounts in India has reached its highest since August because customers lost interest following record-breaking prices. Dealers currently provide discounts reaching $41 per ounce on official domestic prices, representing an increase from previous recent offers of $39 per ounce. The domestic market reflects a transformation as numerous purchasers resist buying at 89,796 rupees per 10 grams. Exclusive evaluations indicate India’s winter gold purchases will experience an enormous yearly decrease, totalling 85% for February this year.
Gold Prices Hit Record High in India
The price of domestic gold in India exceeded all former records by advancing to new heights. The cost of 10 grams of gold rose above 89,796 rupees during the current week, increasing by more than 15% from its starting value this year. The rising prices of gold discourage potential buyers from making purchases because demand remains weak. According to New Delhi-based dealers in bullion products, multiple buyers avoid buying gold at present because they plan to purchase it later when prices decline.
To counter reduced customer interest, dealers have started lowering their gold prices. High gold prices do not motivate buyers because sales remain stagnant as domestic price levels differ significantly from discounted prices. The ongoing market decline in demand makes it unclear when discounting practices will end.
Impact on India’s Gold Imports
Indian gold imports show no signs of recovery as rising prices continue to cause severe reductions expected through the ongoing months. The quantity of imported Indian gold is projected to sink by 85% in February, which represents the lowest level in twenty years. The sudden price rise has produced a steep decline in consumer jewellery demand, followed by a reduction in wholesale demand for gold products. The trade of gold in India experienced its 20-year low mark after imports reached their most minimal point in history.
Due to reduced gold imports, the business sector experiences widespread consequences. The continuous rise in prices creates an oversupply for local dealers, although international markets demonstrate different market conditions. China, Singapore, and Hong Kong observe changing gold market conditions that stem from domestic market shifts and international gold price fluctuations.
Global Trends and the Shift in Gold Markets
The gold market in India faces declining demand, yet different regional markets worldwide demonstrate different price mechanisms. China’s gold market trades below spot prices to $2-$16 per ounce because demand weakness exists in the market. The Chinese gold market experienced a severe downturn in gold consumption during 2024, when purchases of gold jewellery decreased by about 25%. Gold ETF demand from institutions has shown persistence while the national bank continues to purchase this commodity in regular quantities.
