In comparison to international gold prices, gold in the Indian subcontinent was selling at huge discounts on Friday owing to weak demand as well as rise in imports of the precious yellow metal from South Korea. Before the roll out of GST, an excise duty at the rate of 12.5% was applicable on god import from nations with which India had signed an Foreign Trade Agreement or FTA including South Korea.
The traders in India are likely to capitalize on the new tax changes that do not levy any customs on the import of gold and import as much as 25 tonnes of gold from South Korea in the month of July and August.
The discount for this week which was upto $13 an ounce is the highest since September 2016. On Friday, gold prices in the domestic market climbed to Rs. 29,390 for 10 gms. The retail demand is also weak owing to high prices both from the end-user segment and jewelers.
Gold in the spot market also got support on the back of prevailing geo-political tensions and on the anticipation of the likely outcome of the Donald Truump's economic agenda.