Indian gold dealers offer discounts; China sees soft demand

Physical gold was sold at a discount in India for the first time in six weeks, as a weaker rupee drove up prices and moderated demand, while top consumer China saw seasonally slow demand. Domestic prices in India rose to 76,800 rupees per 10 grams on Friday after falling to 74,852 rupees earlier last week.

Jewellers were not making purchases as the rupee fell to a record low, making imports even more expensive, said a Mumbai-based dealer with a private bullion importing bank.

The rupee dropped to a lifetime low of 84.7575 against the U.S. dollar this week.

Indian dealers offered a discount of up to $2 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, down from last week’s premium of up to $3.

“Retail demand was pretty low this week. Wedding season is going on, but lots of buyers seem to be holding off, waiting for prices to drop,” said a New Delhi-based jeweller.