This week, gold demand in India saw a modest increase as softer prices attracted some buyers, although the majority of consumers remained cautious, anticipating further price declines. Concurrently, gold premiums in the Chinese market narrowed due to a slowdown in physical demand. In India, discounts offered by dealers were as high as $61 per ounce compared to the official domestic price, a reduction from the $75 discount seen the previous week. These prices already include a 6% import duty and a 3% sales tax.

Meanwhile, spot gold experienced significant volatility, consolidating within a range of $4,100 to $4,600 per ounce. Influenced by a stronger US dollar and heightened expectations of hawkish US monetary policy, prices touched a four-month low of $4,097.99 on Monday. A jeweler from Kolkata noted, "The price drop is helping to reignite interest in gold. However, current levels are still significantly higher than last year's, leading many buyers to postpone purchases in hopes of a steeper decline."

Domestic gold prices in India were quoted at approximately 141,000 rupees per 10 grams this Friday, down from a peak of 169,880 rupees earlier in the month. A trader from a private bank in Mumbai indicated that volatility in the rupee and instability in international gold prices have kept jewelers in a wait-and-see mode, with many planning to restock after the fiscal year ends.

In China, the world's largest gold consumer, premiums over the international benchmark were $14 to $18 per ounce this week, narrowing from the previous week's range of $10 to $22. Bernard Sin, Regional Director for Greater China at MKS PAMP, commented, "The lower premiums reflect a cooling in physical demand, though market support remains from central bank purchases and quota restrictions." He added that unresolved Middle East conflicts have tarnished gold's reputation as a safe-haven asset.

Mr. Sin further pointed out, "The divergence in China is evident: despite global headwinds suppressing prices, the domestic market remains resilient, supported by policy, cultural demand, and structural supply constraints." In other Asian markets, physical gold in Hong Kong traded at par to a premium of $1.90; in Japan, it was sold at par with spot prices; and in Singapore, prices ranged from a discount of $0.50 to a premium of $3.50 per ounce.