Gold Demand Remains Sluggish in India, China

Gold demand remains weak in India and China due to high prices. Indian buyers await potential import duty cuts in the upcoming budget. Dealers offer discounts in India, while premiums decrease in China. Other Asian markets show mixed trends.

Demand in India, the second-biggest consumer in the world, remained weak as consumers continued to hold back due to high prices and expectations of a possible import duty cut in next month's budget, dealers said. Indian dealers offered discounts of up to $9 per ounce over official domestic prices, better than last week's $13 discount.

Key Points:

- Indian gold prices not far from May's record high of 71,600 rupees per 10 grams, down from May's record high of 74,442 rupees.

Those monitoring the situation estimate that some jewelers are deferring purchases and waiting for a reduction in import duty.

- Rural demand remains tepid as farmers are busy sowing summer crops.

In China, the top gold consumer, it moderated demand.

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Dealer premiums slid to $12-$23 per ounce over global spot prices from $18-$25 a week ago.

- High prices have reduced retail consumption to a great extent.

Other Asian markets:

-Japan: Gold sold at par to $0.5 premiums; the market was quiet due to the weak yen.

-Singapore and Hong Kong: premiums ranged from par to $2.10. Analysts also forecast that demand from China would improve towards the end of the third quarter with the festive season coming.