India Gold Discount Hits Record USD 207 per Ounce As Import Duty Hike Wipes Out Demand
Gold discounts in India surged to a record high this week, touching USD 207 per ounce over official domestic prices - a dramatic swing from last week's discounts of just USD 15 per ounce and premiums of USD 6. The sudden spike came on the back of a sharp import duty hike that effectively froze demand and triggered a wave of investor selling across the country.
Gold discounts in India surged to a record high this week, touching USD 207 per ounce over official domestic prices - a dramatic swing from last week's discounts of just USD 15 per ounce and premiums of USD 6. The sudden spike came on the back of a sharp import duty hike that effectively froze demand and triggered a wave of investor selling across the country.
What Triggered the Record Discount?
Earlier this week, India raised import tariffs on gold and silver to 15% from 6%, sending shockwaves through the bullion market. The world's second-largest gold consumer also tightened duty-free import rules for jewellery exports, capping imports at 100 kilograms per licence. The policy changes led jewellers and retail buyers to step back entirely, while investors rushed to offload holdings, causing discounts to balloon overnight. Gold, Silver Import Duty Hike: India Raises Tariffs on Precious Metals to 15% To Curb Overseas Purchases and Support Rupee.
"Gold discounts jumped to unusually high levels as demand virtually disappeared and scrap supplies increased," said a Mumbai-based bullion dealer. A Hyderabad-based jeweller echoed the sentiment, noting that the sudden price rise had pushed both retail and trade buyers firmly to the sidelines.
Domestic gold prices in India were trading around 160,500 rupees per 10 grams on Friday, after hitting a two-month high of 164,497 rupees earlier in the week. Gold and Silver Prices Surge Up to 8% After Government More Than Doubles Import Duty on Precious Metals.
China Holds Firm as India Weakens
While India's gold market reeled, China told a different story. Bullion in the world's top gold consumer traded at premiums of USD 15 to USD 20 per ounce, supported by resilient investment demand and aggressive industrial buying - particularly from solar and electronics firms stockpiling ahead of anticipated VAT export rebate removals.
"Firmer demand from China will likely counter India's weaker demand after the latter's policy changes," ANZ noted.
Global Gold Market Snapshot
- Hong Kong: Par to USD 2 premium
- Japan: USD 0.50 discount
- Singapore: USD 1 to USD 3.30 premium
Spot gold prices have declined 2.8% this week globally, as rising energy prices stoked inflation fears and reinforced expectations of prolonged higher interest rates.
(The above story first appeared on LatestLY on May 15, 2026 04:32 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
