In a rare post-festival reversal, Indian gold dealers have begun offering discounts of up to $12 per ounce over official domestic prices after weeks of strong festive demand, Reuters reported on Friday. The shift marks the first discount in seven weeks, following a premium of up to $25 during the Dhanteras and Diwali period.

The report attributed the trend to reduced retail demand, price volatility, and investors liquidating earlier gold coin purchases for profit. Domestic gold prices, which recently hit a record Rs 1,32,294 per 10 grams, have now eased to around Rs 1,21,500. With fewer buyers in stores, jewellers are slowing down restocking for the November wedding season.

While India saw discounts, other major Asian markets witnessed rising premiums as investors capitalised on lower spot prices. In top consumer China, bullion traded at par to a $4 premium — a much narrower range than the previous week’s swing between a $20 discount and an $8 premium.

In Singapore, gold traded between par and a $3 premium, while Hong Kong saw sales at par to a $1.6 premium. Japan recorded a $1 premium over spot prices, Reuters noted.

Domestic gold dips amid strong dollar and Fed caution

Meanwhile, the price of 24-carat gold (10 grams) in India fell by Rs 1,649 on a weekly basis till Saturday, largely due to a stronger dollar and fading expectations of US Federal Reserve rate cuts. According to the India Bullion and Jewellers Association (IBJA), the daily price of 10 grams of 24-carat gold slipped Rs 4 on Saturday to Rs 1,20,770.

Bullion has, however, gained 3.9 per cent so far this month, with US gold futures for December delivery trading flat at $4,016.70 per ounce.

Investor sentiment turned cautious after the US Federal Reserve cut its benchmark interest rate by 25 basis points to the 3.75–4 per cent range but signalled that it may be the last cut of 2025. This announcement lowered market expectations of further near-term easing.

According to the CME Group’s FedWatch tool, markets now see a 74.8 per cent chance of another 25-basis-point cut in December, down from 91.1 per cent a week earlier.

Market mood was also influenced by US President Donald Trump’s statement that he had agreed with Chinese President Xi Jinping to reduce tariffs on China in exchange for Beijing curbing the illicit fentanyl trade, resuming US soybean purchases, and maintaining rare earth exports.

Analysts, however, cautioned that doubts persist over the durability of the agreement. Despite the volatility, gold remains up nearly 50 per cent this year, supported by strong central bank demand.

“Elevated risk sentiment continues to offer support to bullion, with key levels seen near Rs 1,18,000 as support and Rs 1,24,000 as resistance. Markets now await clarity on trade balance discussions between the US-China and US-India, which are likely to set the short-term direction," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

He added that gold is expected to remain volatile within this range in the near term.

Current gold prices-Will buyers get more discounts

As of today, the price of gold in India stands at Rs 12,300 per gram for 24 karat gold, Rs 11,275 per gram for 22 karat gold, and Rs 9,225 per gram for 18 karat gold (999 gold).

Buyers in India are currently receiving discounts of up to $12 per ounce, marking the first discount in seven weeks, largely due to slowing demand following key festivals. Domestic prices have fallen from recent record highs. Jewellers are slowing down on building stock for the wedding season due to a sharp drop in footfalls, which pressures prices. However, the short-term direction of gold is expected to remain volatile. Weekly losses have occurred due to weakness in international prices and fading expectations of near-term US rate cuts. The likelihood of more discounts depends on ongoing price volatility and upcoming clarity on US trade balance discussions with India and China.