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Home Gold News Surge in Gold Demand in India Following Tax Reduction

Surge in Gold Demand in India Following Tax Reduction

by anna

A notable surge in gold demand in India has been observed, according to Commerzbank’s commodity analyst Carsten Fritsch.

India’s Intensifying Appetite for Gold

“The reduction in gold import tax and the subsequent decline in local gold prices to a four-month low have sparked a significant rise in demand for gold in India,” Fritsch noted. “As a result, the price premiums charged by dealers over official domestic prices, including import and sales taxes, have surged to as much as USD 20 per troy ounce.”

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Fritsch highlighted that, according to Reuters, this premium level is the highest in ten years. “Just last week, prior to the tax cut, dealers were offering discounts of up to $65—the highest in 28 months,” he added. “In contrast, local gold prices in other Asian countries have remained more stable.”

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In China, discounts offered by dealers relative to the global market are near a two-year low, fluctuating between a $10 discount and a $2 premium, indicating subdued demand. Meanwhile, in Japan, gold is being sold at discounts of $3, while in Singapore and Hong Kong, gold is offered at slight premiums or discounts.

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