India Gold Market Wavers as Government Considers Duty Cut

India's gold market is experiencing a widening discount to landed prices due to uncertainty surrounding a possible cut in import duties on precious metals. The government is reportedly discussing a reduction in duties, which has triggered a wait-and-watch approach among physical buyers.

The current discount on domestic gold is around 3-4% to the landed price, up from 2-2.5% earlier this week. This means Indian gold is now trading significantly below the price at which imported gold would normally land in the country.

Analysts believe that dealers are facing pressure to offer discounts as buyers hold back purchases until there is more clarity on the government's decision. Bhavik Patel, senior commodity analyst at Tradebulls Securities, said that the move reflects classic wait-and-see behavior ahead of a potential policy trigger.

The current 15% import duty was raised in May to curb gold imports and conserve dollar reserves. The government has not announced any final decision on cutting duties yet, but discussions are ongoing.