Gold discounts in India widened this week as a rebound in global prices prompted buyers to postpone purchases amid a severe cash crunch, while demand across Asia remained subdued.
Spot gold rose to its highest in over two weeks on Friday on a weaker dollar and was set to end 2016 more than 9 percent higher, marking its first annual gain in four years. For the week, gold is up about 2.5 percent and is poised to register its best weekly gain since early June.
In India the world's No.2 consumer of the metal, dealers were offering a discount of up to $4 an ounce this week over official domestic prices that include a 10 percent import tax.
They offered discounts of up to $2 last week.
"Demand is still weak. Rural consumers don't have enough cash in hand to make big purchases like gold," said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in Chennai.
Two-thirds of gold demand comes from rural areas where jewellery is a traditional store of wealth. ...
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