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The Indian gold market experienced a surge in prices leading up to the Dussehra and Diwali festivals, marking a significant shift in the market dynamics. This surge, which saw domestic gold prices hit a record high of ₹76,331 per 10 grams, was driven by a heightened demand for gold jewellery during these auspicious festivals. This demand translated into a notable increase in premiums charged by gold dealers, a phenomenon that had not been observed in the preceding two months. The premiums, reaching up to $3 per ounce, represent a stark contrast to the $21 discount seen the previous week, highlighting the significant impact of the upcoming festivals on the market.
Despite the bullish sentiment surrounding gold, the surge in prices had a noticeable impact on sales volume. Saurabh Gadgil, chairman of PNG Jewellers, noted that while the demand for gold remained high, the record prices acted as a deterrent, leading to a reduction in the overall volume of sales. This trend suggests that despite the strong consumer appetite for gold during festivals, the record-high prices have the potential to influence buying patterns and limit the overall market growth.
While the Indian gold market witnessed a surge in prices and premiums, the Chinese market presented a contrasting picture. In China, the post-holiday demand proved to be lackluster, leading to gold being sold at discounts. This suggests that the global gold market is characterized by regional disparities, with factors like cultural practices and economic conditions influencing the local demand for gold. The contrasting trends in India and China showcase the complexity of the global gold market and its susceptibility to diverse regional influences.
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