The World Gold Council (WGC) has reported a significant increase in the discount on Indian domestic gold The World Gold Council (WGC) has reported a significant increase in the discount on Indian domestic gold prices compared to international benchmarks. The change follows reduced jewellery demand since the conclusion of the April–May wedding season.
Domestic Discount Increases
According to the WGC, the average discount on Indian gold—after adjusting for exchange rates and local taxes—rose from approximately $12 an ounce (₹370 per 10 grams) in mid-March to over $38 an ounce (₹1,164 per 10 grams) by 13 June. This change coincides with the end of the wedding season, a period typically associated with increased jewellery purchases.
Kavita Chacko, Research Head, India at the WGC, stated:
“The average discount has widened significantly – from $12/ounce (₹370 per 10 gm) in mid‑March to over $38/ounce (₹1,164) by June 13.”
Market Pricing Snapshot
Gold has seen a notable rise in global pricing, which may be contributing to local demand pressures:
- Spot gold was recently quoted around $3,359.95 per ounce.
- August gold futures closed at $3,376.47 per ounce.
- On the Multi Commodity Exchange (MCX), August gold futures were last traded at ₹98,907 per 10 grams.
- In Mumbai’s local spot market, gold used in jewellery was priced at ₹97,070 per 10 grams as of Thursday morning.
These figures suggest a widening gap between local and global prices, impacting procurement and pricing for jewellers.
Industry Considerations
The widening discount may influence several aspects of business operations:
- Buying Considerations: Lower domestic prices may offer jewellers an opportunity to replenish stock at reduced cost levels.
- Demand Patterns: The decline in seasonal demand highlights the market’s reliance on ceremonial buying periods.
- Stock Management: Jewellers may need to assess inventory planning and procurement timing in response to fluctuating price dynamics.
Strategic Outlook
While demand traditionally rises during wedding and festive periods, the recent slowdown and corresponding price differential may prompt jewellers to review procurement and stock management practices during off-peak months.
