Goldhub blog

India’s gold market in August: Indian imports hit nine-month high but retail demand remained weak

Demand for safe haven assets and strong year-to-date performance, coupled with the price correction likely seen by investors as a buying opportunity, supported gold ETF flows. On the other hand, retail gold demand weakened as consumers waited on the sidelines following a sharp correction in the domestic gold price amid rising COVID-19 cases.

India’s gold market in July: Indian imports hit five-month high as market returns in premium

Mukesh Kumar provides an update on India's gold market in July. Explore Indian jewellery demand, investment demand, gold imports, the gold price, central bank gold and more.

India’s gold market in June: Jewellery demand improved further, continued inflows into Indian gold ETFs

Jewellery demand improved further in the month but failed to recover completely due to recurring lockdowns, lower number of weddings and lack of auspicious days in the month. Bullish gold price momentum and safe-haven demand lured investors towards gold ETFs. Total holdings for Indian gold ETFs reached to 24t in June.

India’s gold market in May: Jewellery demand reviving gradually, Indian gold ETFs attract strong inflows

A rising gold price, higher volatility in the equity market and safe-haven demand lured investors towards gold ETFs. Jewellery demand improved in southern India but remained weak elsewhere.

COVID-19 steals sheen off gold demand on Akshaya Tritiya

A higher gold price, nation-wide lockdowns and concerns over household income curtailed gold demand on Akshaya Tritiya (AT) this year. 

Supply-chain disruptions impact on Indian gold market

To curb the spread of COVID-19, the global restrictions have impacted the global gold supply chain, from production to refining. These supply-chain disruptions have impacted both bullion and gold dore’ imports into India.

India’s gold market in February: Strong inflows in gold ETF amid weak consumer demand

The domestic gold price increased by 4.1% in February m-o-m and 8.4% higher than the end of 2019. The rising gold price and higher volatility in the market lured investors towards gold ETFs.

Gold demand tailed off in second half of December with start of inauspicious period and higher gold price

Wedding and stable domestic gold price at ~Rs 37800/10gm helped demand in first half of December but demand tailed off after 15th December after the beginning of inauspicious period and rising gold price which jumped by 3.7% from mid-December till end of the month.

Wedding season revives gold demand in November a little – but the market is still soft

Summary

• Indian gold imports were 62.3t in October 2019 – 11% lower than the same month last year
• The domestic gold price declined by 2% in November, ending the month 20% higher than the end of 2018
• With the onset of the wedding season in November, the local market was back in premia of US$1/oz on 6th November after trading at discount for more than five months, but lower than expected wedding volumes pushed the market back into discount by end of November
• Late withdrawal of the monsoon, with heavy rainfall in several states of India, damaged kharif crops, leading to more than 50% of kharif crops trading below the minimum support price (MSP) due to high moisture content and little progress in procurement of crops from government . This will impact rural income in Q4 2019

Dhanteras fails to boost gold sales in October

Summary

• Indian gold imports were 38.3t in October 2019 – 15% lower than the same month last year
• The domestic gold price rose by 3.1% during October, ending the month 22.4% higher than the end of 2018
• With the festival of Dhanteras in October and onset of wedding season in November, the discount in the local market narrowed to US$3/oz by end of October from a discount of US$29.5/oz at end of September
• Late withdrawal of the monsoon, with heavy rainfall in several states of India, damaged the kharif crops and more than 60% of kharif crops traded below the minimum support price (MSP) in October due to high moisture content and little progress in procurement of crops from government.

Gold’s rising status in the Persian Gulf

The UAE is an important jewellery market in the Middle East: its ten-year average jewellery demand in 2018 at 54.7t, only was second to Saudi Arabia. However, conditions in the UAE have been tough for gold in recent years.

Gold demand in India continues its downward trajectory in September

• Indian gold imports reached just 26.3t in September 2019 – 61% lower than the same month last year.
• The domestic gold price was 2.4% lower in September compared to August, but 18.7% higher y-t-d.
• With weak physical demand, the discount in the local gold market reached a peak of US$55/oz in September, but narrowed to US$29.5/oz by the end of the month.
• Monsoon levels in 2019 are the highest for 25 years; Kharif sowing almost flat y-o-y.

Gold rally sours Indian demand in August

• The domestic gold price was 10.3% higher in August compared to July, outpacing the LBMA gold price which rose by 7%
• Indian gold imports reached just 28.2t in August 2019 – 70% lower than the same month last year and lowest level since January 2018
• With elevated domestic gold prices and a higher custom duty, the discount in the local gold market widened out as far as US$55/oz in August
• Monsoon rainfall is 5% above Long Period Average (LPA) with Kharif sowing just 0.2% lower than last year; normal monsoon and healthy sowing bodes well for rural gold demand in Q4 2019.

Higher prices and custom duty dampened Indian demand in July

• Indian gold imports reached just 37.7t in July 2019 – 49% lower than the same month last year 
• The domestic gold price was 2.3% higher in July compared to June; 23% higher y-t-d
• The custom duty on gold was unexpectedly raised by 2.5% in the Union Budget on 5th July
• With elevated domestic gold prices and a higher custom duty, the discount in the local gold market reached a peak of US$28/oz in July
• Volatile prices and weak physical demand encouraged healthy gold futures trading on MCX: volumes touched a high of 46.8t in July

Higher domestic price and monsoon dents Indian gold demand in June

Summary

• Indian gold imports were 62t in June 2019 – up slightly on the same month last year 
• The domestic gold price was 6.1% higher in June as compared to end of May
• With higher domestic gold prices, the local discount in the gold market reached $23/oz (1.6% to the international price) by end of June
• Higher and relatively volatile prices encouraged gold futures trading on MCX: volumes touched a high of 28.2t in June