SEATTLE (Scrap Monster): The subdued retail demand for gold in India has forced dealers in the country to offer gold at discount to official prices in the country. The market is yet to witness recovery from Covid-19 induced lull.
The discount offered by dealers on the yellow metal stood at highest level in almost a month. The discounts saw creeping up to levels of $6 per ounce over official domestic prices during last week. The discounts were seen at $5 per ounce levels during the week prior to that. The extreme price volatility in gold has been the driving retail investors away from gold market, sources said.
The yellow metal prices have been noticing high volatility in international market too. The prices witnessed sudden fall over easing of fears over Delta variant of Covid-19 virus. Firmer U.S. treasury yields coupled with strong U.S. dollar too put gold under pressure, with investors gradually moving out of safe haven assets to riskier assets on hopes of economic resurgence across the globe.
The ETF investors are seen waiting for fresh triggers to restart gold purchases. For instance, the inflows into SPDR Gold Trust- the largest gold-backed ETF plunged to its lowest level in over two months.
The emerging trends in U.S. dollar, bond yields and stock market may continue to remain as the key drivers of gold price in the near term.