MUMBAI/BENGA­LURU: Weaker demand in India prompted gold dealers to offer discounts for a second week straight, as a drop in local prices to 2-week lows and a festival failed to lure buyers.

Dealers in India were offering a discount of up to $3 an ounce over official domestic prices, unchanged from last week. The domestic price includes a 10 per cent import tax.

“Since retail demand is weak, jewellers have also cut down purchases. They are maintaining lower-than-normal inventory,” said a Mumbai-based dealer with a private bank.

Domestic gold prices hovered around 30,329 Indian rupees per 10 grams on Friday, after falling to 30,210 Indian rupees earlier in the session, its lowest since March 1.

On Sunday, Indians will celebrate the Gudi Padwa festival, when buying gold is considered auspicious.

“Every year ahead of Gudi Padwa customers make bookings and take deliveries on the festival day. This year bookings are just 30pc of the normal (level),” said Mangesh Devi, a jeweller in the western state of Maharashtra.

Published in Dawn, March 18th, 2018