Discounts fall as gold falls by about 4 per cent

KOLKATA: Discounts offered by domestic gold dealers on global spot benchmark prices have dropped to $30-40 per troy ounce from about $100 per troy ounce last week with prices of the precious metal falling about 4 per cent.

Gold prices have dropped to about Rs 31,000 per 10 gm after having shot up to Rs 32,400 in the aftermath of the June 23 referendum when Britons voted to exit the European Union.

“As price of gold rose in the international market, the movement of gold in the Indian market slowed down. That is why gold was being offered at a discount of almost $100,” said Ketan Shroff, director at Penta Gold.

Industry executives said that speculators took to profit booking as gold price appreciated $100-150 per troy ounce. “This has also affected the market and prices of gold have dropped,” said a trader, who did not want to be identified.


Nonetheless, gold prices are up about 30 per cent since January 1. Shroff said that the price drop has helped revive some demand.

“It is too early but we are seeing some enquiries from buyers. Monsoon too has spread well as of now, which is likely to give some boost to demand. Let us see how it pans out in the next fortnight,” he said.

Analysts said the investors who booked profits in the recent rally are waiting for prices to dip further before they take a long position in the market. The entire impact of Brexit on global markets is likely to unfold in the coming months, they said.