Jewellers discount prices as festival fails to lure

Gold market in Dubai, Deira Gold Souq

MUMBAI: Weaker demand has prompted gold dealers to offer discounts for a second week straight, as a drop in local prices to 2-week lows and a festival failed to lure buyers.

Dealers were offering a discount of up to $3 an ounce over official domestic prices, unchanged from last week. The domestic price includes a 10 percent import tax.

“Since retail demand is weak, jewellers have also cut down purchases. They are maintaining lower-than-normal inventory,” said a Mumbai-based dealer with a private bank.

Domestic gold prices hovered around Rs 30,329 per 10 grams on Friday, after falling to Rs 30,210 earlier in the session, its lowest since March 1.
On Sunday, people will celebrate the Gudi Padwa festival, when buying gold is considered auspicious.

“Every year ahead of Gudi Padwa customers make bookings and take deliveries on the festival day. This year bookings are just 30 percent of the normal (level),” said Mangesh Devi, a jeweller in Maharashtra.

Physical gold demand remained subdued in other Asian hubs as well, as investors remained cautious of an expected hike in U.S. interest rates for the first time this year.

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