Sharp rise in demand for Gold in India after tax cut – Commerzbank
A significant increase in demand for Gold in India can be observed right now, Commerzbank’s commodity analyst Carsten Fritsch notes.
India’s hunger for Gold becomes stronger
“The reduction in the Gold import tax and the resulting fall in local Gold prices to a 4-month low has led to a significant increase in demand for Gold in India. As a result, the price premiums demanded by dealers in India over official domestic prices, including the import and sales taxes payable, have risen to up to USD 20 per troy ounce.”
“According to Reuters, this is the highest level in ten years. Last week, before the tax cut, they were still offering discounts of up to $65, which were the highest for 28 months. By contrast, local Gold prices in other Asian countries are less volatile.”
“In China, the discounts offered by dealers compared to the global market level are still close to a 2-year low, with the range varying between a discount of $10 and a premium of $2. This indicates that demand remains subdued. In Japan, Gold was sold at discounts of $3, while in Singapore and Hong Kong Gold was offered at either slight premiums or discounts.”
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FXStreet Insights Team
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