India Gold Premiums Drop by Half as Price Swings Scare Off Buyers; China Demand Picks Up Before Lunar New Year
Gold premiums in India dropped by more than half this week from decade highs, as wild price swings kept buyers on the sidelines. Meanwhile, in China, demand got a boost as prices pulled back from record levels just in time for Lunar New Year shopping, traders said.
In India, bullion dealers were charging premiums of up to $70 per ounce over official domestic prices this week — that includes import and sales taxes — down sharply from $153 per ounce last week, which was the highest level since December 2013. Dealers said buyers are hesitant because prices have been all over the place, and no one’s sure where they’re headed next.
Last week, premiums shot up on expectations that the government would hike import duties in the federal budget. But demand cooled off after Finance Minister Nirmala Sitharaman left the duty structure unchanged in the 2026/27 Union Budget presented on February 1.
Domestic gold prices in India were trading near 150,000 rupees per 10 grams on Friday. Just last week, they hit a record 180,779 rupees before dropping as low as 133,687 rupees during the week. That’s a huge swing.
Over in China, bullion was trading at a premium of $35 per ounce over global spot prices, up from $32 last week, as shoppers ramped up purchases ahead of the holiday season. Analysts said the price correction encouraged both jewellery buying and physical investment demand.
Spot gold prices have fallen more than 13.5% since hitting a record $5,594.82 on January 29. That’s given some buyers the confidence to jump back in.
Elsewhere in Asia, gold traded at par to premiums of $1.70 in Hong Kong, at discounts of up to $7 in Japan, and between a $0.50 discount and $3 premium in Singapore.
Meanwhile, China’s gold consumption dropped for a second straight year in 2025, though there’s an interesting twist: sales of bars and coins overtook jewellery purchases for the first time. That shift was driven by rising safe-haven demand, according to the China Gold Association. People are buying gold not to wear, but to hold.
