MUMBAI Gold importers in India, the world's biggest buyer of the metal, struggled to clear their old stock even at a discount to market price while consumers digested a 50 percent hike in import tax.
* Sales have been declining in a wedding season, which will continue till May, while festivals are also scheduled during this period. However, over the longer term, industry officials say gold demand is unlikely to waiver.
* "Traders had stocked before the tax in anticipation of demand, but now the market has slowed," said Lokesh Kumar Agarwal, chairman of Lucknow-based wholesaler Brijwasi Bullion and Jewellers, adding people are offering discounts of 100 rupees.
* Gold for February delivery on the Multi Commodity Exchange (MCX) was 0.28 percent lower at 30,606 rupees per 10 grams by 2:50 p.m., in line with global markets.
* The yellow metal had touched a high of 30,847 rupees on January 21, when the federal government raised import tax to 6 percent from 4 percent.
* Global gold inched down, pulling further away from a one-month high hit earlier in the week, as increasing confidence in the global economic recovery dulls bullion's appeal as a safe-haven investment.
* A weaker rupee kept the downside in prices limited. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.
* Silver for March delivery on the MCX was 0.76 percent lower at 59,410 rupees per kg.
(Reporting by Siddesh Mayenkar; Editing by Subhranshu Sahu)
Trending On Reuters
Some 30,000 Indian soldiers guarding the border with Bangladesh have a new mandate under Prime Minister Narendra Modi's government this year - stop cattle from crossing illegally into the Muslim-majority neighbour. Full Article
Ex-Goldman director Rajat Gupta fails to void insider trading conviction Full Article