The price of gold in India is often different from the rest in the world. Given the current circumstances, that situation may not change anytime soon either. The upcoming festivals may spark a bit more demand for jewelry, assuming consumers have funds to burn.
More Discounts on the Price of Gold
For weeks in a row, Indian jewelers have tried to sell their goods to consumers. Most of these efforts have been in vain so far, with no real improvement in sight. Domestic jewelers have high expectations for the upcoming festivals, although the success remains difficult to quantify. The demand for bullion simply isn’t there, at least in this part of the world.
Until the festivals come around, Indian gold dealers will keep offering discounts. Getting customers back into their shops has been an immense challenge. Asian bullion hubs aren’t stirring as of yet, which isn’t helping matters. It is, in India, still possible to buy an ounce of gold at $23 below the market value.. A very tangible discount, although it was nearly $30 a week ago.
Assuming the price of gold remains near the current level, there may be an increase in demand. How big the demand will be, is difficult to predict. Until something major changes, Indian jewelers will keep stockpiling on bullion for the future.
China’s Discounts Reverse
In China, the discounted price of gold situation is improving ever so slightly. Discounts still apply, but they are no longer in the $50 range. Instead, the discounts now range from $44 to $48 per ounce of gold. A good way to acquire some cheaper gold, especially during this overall lull in the trading markets.
However, even in that country, there is no real recovery of the physical markets. An unfortunate situation, but completely to be expected due to COVID-19. It may take until 2021 until this market picks up again. Gold price discounts have been in effect since February of 2020.
One has to wonder when this discounted price of gold will return to normal levels. Achieving this goal on a global scale will require a ton of effort and demand. Fueling demand will be challenging, as jewelers are moving toward repurposing bullion whenever possible