Gold prices: India shifts to discount

Physical gold buying waned in major Asian centres this week as bullion prices rebounded from recent lows, with dealers in India offering the metal at a discount for the first time in over a month as an uptick in local rates moderated demand.

In India, the world's second-biggest consumer of the metal after China, gold was being sold at a discount of up to $2 an ounce over official domestic prices this week, compared with a premium of $1 last week. The domestic price includes a 10 percent import tax.

“The market lost momentum due to the price rise. Buyers are waiting for prices to fall below $1,200,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.

In the Indian market, gold futures were trading around 30,607 rupees per 10 grams on Friday afternoon, up more than 4 percent from their lowest level in seven months hit on Aug. 17.

“As the rupee started appreciating in the last few days, jewellers are taking a pause,” said a Mumbai-based dealer with a private bank.

The Indian rupee was trading around 71.93 after hitting a record low of 72.92 per dollar earlier this week.

Meanwhile, premiums in China have ranged between $3 and $6 an ounce this week, versus last week's $6-$7, traders said.