Gold continued to trade at a significant discount in India this week due to price volatility impacting demand, while premiums in China saw a slight decrease.
Indian dealers reported discounts of up to $78 an ounce over official domestic prices, including a 15% import duty and a 3% sales tax, a notable reduction from the previous week’s discounts, which reached up to $207 an ounce. “Retail buyers are a bit confused by the recent price swings after the government raised the import duty earlier this month. Most of them are just waiting for prices to settle down,” a jeweller based in Kolkata commented.
Earlier this month, the Indian government increased import tariffs on gold and silver from 6% to 15% in an effort to curb foreign purchases of these metals, thereby alleviating pressure on foreign exchange reserves exacerbated by rising oil prices. With the wedding season coming to an end and continued uncertainty surrounding retail demand, jewellers are hesitant to increase their inventory, according to a bullion dealer in Mumbai affiliated with a private bank.
In China, the top consumer of gold, bullion traded at premiums of $10 to $20 an ounce over the global benchmark, a slight decrease from the previous week’s premiums of $15 to $20. Bernard Sin, regional director of Greater China at MKS PAMP, noted, “Fed rate-hike anxiety, rising bond yields, and dollar strength continue to weigh on gold in China.” A stronger dollar raises the cost of dollar-denominated bullion for holders of other currencies, while high bond yields increase the opportunity cost of holding non-yielding assets like gold.
“Near-term, physical demand remains caught between conflict-driven safe-haven demand and policy-driven headwinds,” Sin added. Spot gold prices fell to a nearly two-month low on Wednesday, driven down by higher Treasury yields and a stronger dollar.
Published on May 22, 2026.
