Gold discounts in India increased this week amid the end of the wedding season and a rise in prices from recent lows. According to news agency Reuters, dealers in India offered discounts of up to $9 an ounce on official domestic prices this week, up from last week’s discount of $5. Gold rates in India include 10.75% import and 3% GST. As the wedding season is coming to an end, the retail demand is likely to remain subdued this month.
Gold prices in India (MCX Futures) closed down 0.6% on Friday 50,984 per 10 grams. Gold rises despite fall 1,000 from this May’s low 49,700.
Gold fell sharply in global markets on Friday as better-than-expected US jobs data raised concerns about aggressive monetary policy tightening. The US dollar also strengthened. Spot gold fell 1% to $1,848.67 an ounce.
Data released Friday showed US non-farm payrolls increased by 390,000 in May, compared with a Bloomberg survey estimate of 318,000. Meanwhile, the unemployment rate remained unchanged at 3.6% for the month.
Higher US interest rates increase the opportunity cost of holding SleepIn which there is no interest while the bullion is priced to boost the dollar.
At the same time, “gold is also supported by safe haven purchases amid rising challenges to the global economy, persistent inflation and geopolitical tensions. “Increased volatility in energy prices has raised inflation concerns. However, ETF inflows show that investors are using higher price to exit the market,” Kotak Securities said in a note.
The brokerage said trends in the US dollar, bond yields and equities could continue to affect gold and silver and would focus on economic data, central bank comments and developments related to the spread of the virus and the Russia-Ukraine war.
The US Federal Reserve is expected to increase rates by 50 basis points in the next two meetings.
Feather Silver“Industrial metals outlook has improved with China lifting virus-related restrictions but growth concerns remain. ETF outflow reflects weak investor interest,” Kotak Securities said.
US stocks fell sharply on Friday after topping May data, suggesting the labor market remains strong enough for the Fed to raise rates sharply as it grapples with runaway price gains. (with agency input)