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Price Sensitivity Divides Asian Gold Markets: India Offers Deep Discounts While China Pays Premiums

Physical gold demand in India has virtually disappeared as prices have rallied to unprecedented levels, forcing dealers to offer steep discounts of up to $74 per ounce over official domestic prices. Indian domestic gold prices reached a record high of 95,894 rupees per 10 grams, a level that even market bulls didn’t anticipate a few months ago.

Banks had increased their gold imports in March at significantly lower prices and are now offering these supplies at substantial discounts. Although gold was imported ahead of the Akshay Tritiya festival, the dramatic price spike is expected to dampen festival demand considerably.

In contrast, China continues to show robust demand despite record prices, with dealers charging premiums of $15-$21 per ounce, albeit lower than last week’s $24-$54 premium range. According to independent analyst Ross Norman, this sustained Chinese demand “is a departure from the norm” as Asian buyers typically show more price sensitivity.

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Stack of gold coins standing still on a dark reflective surface as ripples spread outward, illustrating how Fed rate hike gold pressure creates short-term waves without moving the structural floor.
News

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