Editor’s Note
**Editor’s Note:** This week’s sharp rise in India’s gold import tariffs has driven discounts to a record $207 per ounce, as higher costs curb demand and spur investor selling. In contrast, China’s sustained investment appetite keeps premiums firm, highlighting divergent market dynamics across Asia.
Gold discounts in India surged to record levels this week after a sharp increase in import tariffs cooled demand and triggered selling by investors, while sustained investment demand in China kept premiums for the metal firm.
Dealers in India quoted discounts of up to $207 per ounce against official domestic prices this week, including the 15% import tariff and 3% sales levies.
This marked a drastic shift from the previous week, when discounts were limited to $15 per ounce and premiums reached up to $6.
The sharp rise in prices led investors to unwind positions, while jewelers and retail buyers largely stayed on the sidelines.
Earlier this week, India raised import tariffs on gold and silver to 15% from 6%.
Authorities also tightened rules on tax-free gold imports used for jewelry exports, limiting imports to 100 kilograms per license.
Domestic gold prices in India traded near 160,500 rupees per 10 grams on Friday.
Prices had risen to 164,497 rupees earlier in the week, marking the highest level in more than two months.
The widening discounts reflected weakening consumer sentiment in the world’s second-largest gold consumer market following the policy changes.
ANZ analysts noted that stronger demand from China could help offset lower Indian demand after the tariff hike.
In China, the metal traded at premiums of $15 to $20 per ounce over global benchmark prices, virtually unchanged from last week’s premiums of $14 to $20.
Bernard Sin, Greater China regional director at MKS PAMP, said premiums remained stable due to resilient investment demand and strong industrial buying activity.
Continued industrial demand helped sustain Chinese premiums despite widespread weakness in global metal prices.
Spot gold prices have fallen 2.8% so far this week, as rising energy prices fueled inflation concerns and reinforced expectations that interest rates could stay higher for longer.
Market sentiment was also influenced by gains in U.S. stocks.
On Thursday, the Dow and S&P 500 advanced about three-quarters of a percentage point.
In other Asian trading hubs, premiums remained relatively modest.
In Hong Kong, gold traded between par and premiums of $2 per ounce.
In Japan, the metal sold at a discount of $0.50 per ounce, while in Singapore gold traded at premiums ranging from $1 to $3.30 per ounce.