Buyers find a 20% discount on gold not alluring enough

Kolkata: As gold price touched a six-year high of around Rs 39,000 per ten gms on Tuesday, bullion dealers offered the precious metal at a 20 per cent discount compared to last week owing to the paucity of buyers. Traders and experts said the ongoing volatility in gold prices is likely to impact imports in August as well and may follow the trend seen in the previous month, when imports fell 55 per cent year-on-year.

“Last week, the discount on gold was Rs 750 per 10 gm. This week, it has touched Rs 900 per 10 gm or $55 per troy ounce. There is hardly any demand in the market. While on the one hand there is a liquidity crunch, on the other hand the volatility in gold price is keeping buyers away,” said Mukesh Kothari, director of the bullion firm RiddiSiddhi Bullion. Gold prices scaled a sixyear high on Tuesday as concerns mounted over protests in Hong Kong and an Argentine currency crash amid fears of a global economic slowdown, prompting investors to move away from riskier assets. Spot gold rose 0.7 per cent to $1,521.98 per ounce, the highest level since April 2013. US gold futures rose 1 per cent to $1,533 an ounce.

Jateen Trivedi, commodity analyst, Bonanza Portfolio said that after six long years of wait the shine on gold has just started. “The whole story shall unfold further with rupee depreciation continuing and global trade war not looking like ending any soon in near future.