- India discount at $14/oz, up from $12 last week
- Chinese demand down as tax exemption for gold ends
- Spot gold heads for weekly gain, but off record highs
Nov 7 (Reuters) - Physical gold demand in India remained subdued this week as volatile prices deterred buyers from making purchases and prompted dealers to offer steep discounts to lure them, while demand cooled in China on changing tax regulations.
Indian dealers were offering a discount of up to $14 per ounce over official domestic prices, inclusive of 6% import and 3% sales levies, up from the last week's discount of up to $12.
Investment demand was the key driver last month, but now even investors are staying on the sidelines, waiting for a clear price trend, said a New Delhi-based jeweller.
Global spot gold prices were on track for a weekly gain, but down about 9% since hitting a record high of $4,381.21 on October 20.
Domestic gold prices were trading around 121,000 rupees ($1,376.64) per 10 grams in India after hitting a record high of 132,294 rupees last month.
Last month, India celebrated the Dhanteras and Diwali festivals when buying gold is considered auspicious and which are among the busiest gold-buying days in the country.
"After good demand during festivals, jewellers need to rebuild stock for the upcoming wedding season, but many are delaying purchases," said a Mumbai-based dealer with a private bank.
In top consumer China, bullion traded anywhere from a discount of $2 to a $5 premium an ounce over the global benchmark spot price . Last week, bullion changed hands at par to a premium of $4 an ounce.
China ended a long-standing tax exemption policy for some gold retailers reducing it to 6% from November 1, according to new policies made public by the Ministry of Finance. The lower exemption will last until December 31, 2027.
"China's physical gold market is cooling, weighed down by regulatory headwinds and the introduction of new VAT (value-added tax) rules, while exchange-traded investment remains largely unaffected," said Barnard Sin, regional director of Greater China at MKS PAMP.
"Expect a short-term slowdown, particularly in jewellery consumption, due to higher cost for retailers (in China)."
In Singapore , gold traded between a $1.7 to $3.5 premium. Gold in Hong Kong was sold at premiums ranging between $1.50 and $2.50. In Japan, gold was sold at par with spot prices on weak demand.
($1 = 87.8950 Indian rupees)
Reporting by Ishaan Arora and Brijesh Patel in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Subhranshu Sahu
Source: Reuters