MUMBAI: Physical gold dealers in India were forced to offer the steepest discount in six years last week to lure customers put off by a jump in domestic prices, with some people in top Asian hubs selling their bullion to cash in on the rally.

       Earlier last week, global benchmark spot gold prices rose to near an all-time high of US$2,020.47 (RM8,474.86) as investors sought refuge from uncertainties spurred by the Ukraine crisis.

       Local gold prices in India, traditionally the biggest gold consumer after China, jumped to 55,558 rupees (RM3,036) per 10 grammes, not far from the all-time high of 56,191 rupees (RM3,071) hit in 2020.

       The price surge hammered demand and prompted dealers to offer discounts as high as US$77 (RM322.98) an ounce over official domestic prices – inclusive of 10.75% import and 3% sales levies – versus US$27 (RM113.25) in the week prior to last week.

       “Demand is less than 10% of the normal,” said Harshad Ajmera, a gold wholesaler in Kolkata.

       A Mumbai-based bullion dealer with a private bank said some consumers were selling their old jewellery to take advantage of elevated prices.

       In China, discounts widened to US$2 to US$4 (RM8.39 to RM16.78) an ounce over global benchmark rates compared with last week’s range of a US$0.8 (RM3.36) premium to US$2 (RM8.39) discount.

       Chinese demand is “clearly on its knees,” said independent analyst Ross Norman, amid “the speed and the move higher” in gold prices.

       In Hong Kong, gold was sold at US$3 (RM12.58) discounts.

       Although selling has slowed as prices retreated toward the end of last week, most buyers awaited a bigger dip, said Peter Fung, head of dealing at Wing Fung Precious Metals.

       Singapore, meanwhile, saw premiums of US$1 to US$1.80 (RM4.19 to RM7.55) an ounce, versus the previous week’s US$1.80 to US$2.50 (RM7.55 to RM10.49).

       “It’s been very busy at our retail store with gold climbing above US$2,000 (RM8,389) again this week,” said Vincent Tie, sales manager at dealer Silver Bullion, with buyers citing high inflation as their motivation to bank on gold. — Reuters