Gold demand still lacklustre, jewellers expect import duty cut in Budget

Indian dealers offered a discount of up to $9 an ounce over official domestic prices â€" inclusive of 15% import and 3% sales levies, versus last week's discount of $13

Indian gold demand remained lacklustre due to higher prices and as some buyers were postponing purchases hoping the government would cut import duty in the upcoming budget, while demand in China also moderated.

Prime Minister Narendra Modi's government is likely to present India's budget in July.
 

"Expecting an import duty cut in the budget, some jewellers are postponing purchases. Besides, retail demand is very weak," said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.
 

In India, the world's second-largest gold consumer and a major importer, domestic prices were trading around 71,600 rupees per 10 grams on Friday, after hitting a record high of 74,442 rupees last month.
 

Indian dealers offered a discount of up to $9 an ounce over official domestic prices “inclusive of 15% import and 3% sales levies, versus last week's discount of $13.
 

"The monsoon season has begun, and in rural areas, farmers are busy sowing summer crops. As a result, jewellery stores are experiencing lower foot traffic," said a Mumbai-based dealer with a private bullion importing bank.
 

In top consumer China, dealers charged premiums of $12-$23 per ounce over international spot prices this week compared with $18-$25 last week.

"Retail consumption in China has dropped significantly, mainly due to the high gold price and I believe it will pick up near to the end of third quarter when it is closer to the festive seasons in China," said Herman Chong, business development manager at Rotbart & Co.
 

In Japan , bullion was sold at par to $0.5 premiums.
 

Japan's bullion market has been very quiet as yen is very weak and being kept down by a strong dollar, said a Tokyo-based trader.

Meanwhile, in Singapore, gold was sold at par to $2.10 premiums and at par to $2 premiums in Hong Kong.
 

There's more footfall compared to last week, with an increase in client transactions, especially from the wholesale side, said Brian Lan at Singapore-based dealer GoldSilver Central.