Gold rebate in India narrowing

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(Kitco News) – Gold traders in India reported a smaller discount on gold to lower March imports and scrap supply. Discounts for the yellow metal in the country fell to their lowest level in two months on improving demand. Traders in India offered discounts of up to $12 an ounce from official domestic prices last week, compared to $40 the previous week. Gold prices in India include 10.75% import and 3% GST.

Traders said the smaller rebate was due to lower imports in March and lower stocks of scrap or the flow of old jewelry and coins. However, they said fixed prices could dampen demand during upcoming festivals and wedding seasons.

Gold prices in India settled above a monthly high on Thursday as futures closed at ₹52,991 per 10 grams, while silver was at ₹69,100 per kg. In world markets, gold prices also hit a high of over a month amid the war between Ukraine and Russia and increased inflation.

Ravindra Rao, Head of Commodity Research at Kotak Securities “Recent US inflation data has further reinforced the case for aggressive Fed tightening. However, inflation concerns have also increased gold’s appeal as an inflation hedge. Gold is also supported by the fighting between Russia and Ukraine and the increasing spread of viruses in China. ETF inflows also showed buying interest,”

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