Gold price retreat boosts Indian buying demand, physical gold demand now showing marginal improvement.

Notice that this week, due to the softening of gold prices, there has been a slight increase in demand for gold in India, attracting some buyers to enter the market, but most consumers still remain cautious and are waiting for prices to further drop; at the same time, due to slowing physical demand, the premium on gold in the Chinese market has narrowed. This week, discounts offered by gold traders in India reached as high as $61 per ounce (compared to the official domestic gold price), narrowing from last week's $75 discount. The above prices already include a 6% import duty and a 3% sales tax. Meanwhile, spot gold experienced significant volatility, ranging from $4100 to $4600 per ounce. Due to the strength of the US dollar and expectations of hawkish US monetary policy, gold prices touched a four-month low of $4097.99 on Monday. A jewelry trader from Kolkata said, "The drop in prices is helping to rekindle people's interest in gold. However, the current price is still much higher than last year's levels, and many buyers are delaying purchases in hopes of further price declines." On Friday, the domestic gold price in India was reported at around 141,000 rupees per 10 grams, having surged to 169,880 rupees earlier this month. A trader at a private bank in Mumbai pointed out that fluctuations in the rupee and the instability of international gold prices have put many jewelers in a wait-and-see mode, with many planning to wait until the end of the fiscal year to replenish their stocks. In China, the premium on gold compared to the international benchmark price was $14 to $18 per ounce this week, narrowing from $10 to $22 last week. Bernard Sin, Regional Director of MKS PAMP Greater China, said, "The decrease in premium reflects a cooling in physical demand, but central bank gold purchases and quota restrictions continue to support the market." He added that unresolved conflicts in the Middle East have weakened gold's reputation as a safe haven asset. Bernard Sin further noted, "The divergence in China is evident: despite global negative factors pressuring gold prices, the domestic market remains resilient due to policy, cultural demand, and structural supply constraints." In other Asian markets, physical gold trading prices in Hong Kong ranged from at par to a $1.90 premium; gold prices in Japan were on par with spot prices; and in Singapore, gold prices ranged from a $0.50 discount to a $3.50 premium per ounce.