Gold Prices Ease On Demand Slump

Gold prices eased in the international as well as Indian markets at the end of this week. On MCX, gold futures closed 0.15 percent or Rs 58 lower at Rs 37,895 per 10 grams on Friday. Spot gold was down by 0.1 percent at $1,462.97 per ounce.

Demand for the precious metal was reportedly dull this week in China and India, the two biggest consumers of gold.

In China, on the back of slowing economic growth amid its trade war with the US and Hong Kong protests, sales have been weak. Hong Kong now awaits the district council elections scheduled for Sunday after months of unrest due to pro-democracy protests.

"Demand is generally higher this time of the year (in Hong Kong), but this year it is quieter mostly because of the political situation there," said Peter Fung, head of dealing at Wing Fung Precious Metals to Reuters.

In India as well, demand has fallen due to a surge in retail price. To add to the already high price of Rs 38,000/10 grams, buyers of the metal in the country have to pay a higher import duty of 12.5 percent (from the earlier 10 percent) and 3 percent GST (goods and service tax).

Dealers have been offering discounts to push sales as jewellers wait cautiously for a price correction.

Gold imports in India fell for the fourth straight month in October and are a third lower from a year ago.

In the global market, gold prices have declined as much as 5 percent from the 6-year high of $1,557 an ounce seen in September.