Insights

Following June's sharp price decline, gold prices have broadly stabilised in July. While overall consumer demand remained subdued, lower prices supported jewellery purchases, ETF inflows and digital gold demand. At the same time, bar and coin demand softened, and gold imports declined further.

India’s gold market cooled in May as higher duties, elevated domestic prices and seasonal softness weighed on demand. Physical buying softened across jewellery, bars and coins, while imports fell from the previous month. ETF investors booked profits after the price rally following the duty hike, resulting in record May outflows before inflows resumed in June; digital gold buying also slowed, though it remained above average.

Gold prices partly recovered in April after March’s sharp decline, with domestic discounts narrowing on import curbs and supply constraints. Listed jewellers saw strong Q1 growth, driven by wedding and discretionary demand, higher ticket sizes, and expansion. March ETF inflows were hit by redemptions, though participation rose. The Reserve Bank of India kept gold reserves steady, while imports fell to a nine-month low.

Gold prices have pulled back from end-January highs, pressured by a stronger US dollar and a rise in US Treasury yields. In addition, outflows from gold ETFs, particularly US-listed gold ETFs, – likely indicating tactical profit taking from the sharp rally in January – further weighed on prices. However, the pullback was contained, as heightened geopolitical tensions and ongoing policy uncertainty continued to reinforce gold’s role as a safe-haven asset.

Gold prices scaled fresh highs before turning volatile and are now moving in a holding pattern. The firm price trend supported steady demand across jewellery and investment products, with gold ETFs hitting key milestones in January amid record inflows, holdings and participation. Digital gold purchases surged to new highs, RBI gold holdings edged up slightly, and imports rose, driven largely by strong investment demand

The inauspicious period from mid-December to mid-January is likely to weigh on jewellery demand, while investment interest is expected to be sustained.

The busy wedding season over the coming months (November–March), with a high number of anticipated weddings, is expected to support jewellery demand. Investment interest in gold is likely to persist amid broadly bullish sentiment around gold.

In this episode of Unearthed, hosts Joe Cavatoni and John Reade, Senior Market Strategists at the World Gold Council, are joined by Sachin Jain, CEO of the World Gold Council India, to explore the pivotal role of India in the global gold market.

Gold continues its extraordinary price rally, having reached 48 all-time highs this year. Geopolitical tensions, strong investment demand, dollar weakness, financial market risk and expectations of dovish Fed policy lifted international prices by 11.6% in September and by an additional 7.9% in the first two weeks of October, pushing past the US$4,000/oz milestone.

Gold prices regains momentum, hits new records; discounts narrow in India. Investment demand steers festive gold buying revival.

As the festive and wedding season approaches, there are signs that gold jewellery demand is gaining momentum, and with investment interest holding firm, overall gold demand could receive a boost.

Gold extends gains in July, remains top performer with y-t-d gains of 28%. Seasonal weakness weighs on jewellery sales; investment buying gains ground.

The June–July period typically marks the off-season for gold in India, particularly for jewellery. A recovery in demand is anticipated with the onset of the festive and auspicious buying season from mid-August.

Stability in prices could prompt a resurgence in demand. Consumer sentiment that the downside to gold prices is limited would reinforce gold’s appeal as a reliable investment.

Seasonal and wedding related purchases may support gold demand this month and next. Investor interest is likely to strengthen as gold’s appeal as a safe-haven asset and portfolio diversifier heightens amid global economic uncertainties and financial market volatility.

Gold’s price momentum remains strong, breaching records, with domestic gold prices seeing gains of 13% y-t-d. Price rise dampens jewellery purchases, boosts old gold sales, while investment demand is sustained: gold ETFs saw healthy inflows in February, though below January’s peak.

Domestic prices track international highs, but demand pressure results in deeper discounts from local dealers. Price surge dims jewellery demand, while investment interest lingers.

Even with a price moderation in November and December, gold surpasses other key asset classes to lead returns in 2024. Jewellery demand slowed amid high prices and an inauspicious period on the Hindu calendar.

Jewellery demand weakens post-Diwali, while investment demand for gold bars and coins remains strong. Indian gold ETFs maintain strong inflows, adding 14.5t year-to-date.

Despite record-high prices Diwali gold demand was healthy, with strong sales driven by investment appeal. Indian gold ETFs continue to attract strong interest from investors, with October seeing the largest inflows on record. The Reserve Bank of India (RBI) has purchased 64t of gold to date this year, making it the second highest annual purchase on record. Uptick in gold imports in October.