Gold: Premiums hit 10-month high as festive season draws near; China discounts widen

Physical gold premiums in India rose to a 10-month high this week as record prices near a festive season failed to deter investors from buying bullion in anticipation of further gains, while discounts in China widened to a five-year peak.

Gold prices in India were trading around ₹1,09,500 ($1,240.09) per 10 grams on Friday after hitting a record of ₹110,666 earlier this week.

“The rally just made people even more sure gold will keep climbing, so they were snapping up coins and bars,” said a Chennai-based bullion dealer.

This week, dealers were quoting a premium of up to $7 per ounce over official domestic prices, inclusive of 6 per cent import and 3 per cent sales levies, the highest since mid-November 2024. Last week, they were quoting a discount of up to $6 and a premium of $2.

Retail buyers had been on the sidelines waiting for a price correction, but now they’re returning to finalise purchases ahead of the festive season, said a Mumbai-based bullion dealer with a private bank.

Indians will celebrate the Dussehra and Diwali festivals in October, when buying gold is considered auspicious.

In top consumer China, dealers offered discounts of $21-$36 per ounce over global benchmark spot prices , the lowest level since May 2020, compared to $17-$24 last week.

“Gold premiums in China have been on the slide over the last 6 months with weak domestic demand as investors pivot to risk-on and are shifting focus to equities,” independent analyst Ross Norman said.

Swiss customs data released on Thursday showed gold exports to China jumped 254% in August from July to their highest level since May 2024. Analysts attribute the rise to expected increase in demand by the end of September.

Gold in Hong Kong was sold at par to a $1.60 premium, while in Singapore , premiums ranged from par to $1.40.

Japan’s bullion traded at par to a premium of $1. “Local retailers love to buy gold as great asset class and this trend will keep going,” a trader said.

($1 = 88.3002 INR)

Published on September 19, 2025