Indian government raises import tariffs, triggering record $207 gold discount
Business
India's gold market is in chaos right now: discounts have jumped to a record $207 an ounce after the government raised import tariffs on gold and silver from 6% to 15%.
This move was meant to protect India's foreign exchange reserves, but it sent domestic gold prices soaring by over 7%, reaching their highest level in more than two months.
Indian gold profit taking boosts supply
With prices up, some investors are cashing out for profits, which pushed discounts even higher.
The tariff hike also boosted gray-market margins and sparked worries about more gold smuggling, according to a Chennai bullion dealer.
Demand from shoppers has dropped, and jewelers are holding back, leading to extra supply.
Meanwhile, investors are booking profits in gold ETFs and adding to supply.