Insights

The international gold price jumped by 7.4% in November to US$1,760/oz, boosted by lower yields and dollar weakness.

The domestic gold price diverged from the international gold price: the MCX Gold Spot price rose marginally by 0.2% compared to a 2% decline in the LBMA Gold Price AM in USD

Healthy retail demand in September drove the local price briefly into premium, but market dynamics generated a discount for much of the month. Indian gold ETFs witnessed a marginal net inflow of 0.4t in September as a domestic gold price correction enticed investors back into gold  
 

Retail demand is gradually picking up, supported by festivals during the month and ahead of the wedding season. Official imports are expected to pick up during August on the back of improved retail demand.

The domestic gold price declined by 0.7% during June, ending the month at Rs50,809/10g. Retail demand remained muted as the wedding season ended and sowing activity picked up with the onset of the monsoon.

On 30 June, India’s Ministry of Finance notified the industry that basic custom duty (BCD) on gold would increase from 1 July.

Retail demand remained strong y‑o‑y during the first three weeks of May due to robust Akshaya Tritiya sales, wedding demand and the lower base period of 2021. But demand softened during the last week of the month due to a higher gold price and fewer auspicious marriage dates.

The international gold price declined in April, led by interest rate volatility and dollar strength. The LBMA Gold Price AM in USD fell by 0.4% and the MCX Gold Spot in rupees (INR) rose by 1% over the month.

Gold prices extended their gain in March, led by higher inflationary pressures and rising geo-political risks. The LBMA Gold Price AM in USD and the MCX Gold Spot in rupees (INR) rose by 1.1% and 1.7% respectively over the month.

Retail demand weakened as a sudden spike in the gold price resulted in the postponement of gold purchases in the second half of the month.

India’s equity market has outperformed major equity markets in 2021, triggered by signs of economic recovery and an accommodative monetary policy from the Reserve Bank of India (RBI).

Retail demand strengthened in the month with festival and wedding purchases. Official imports were flat m-o-m as stocks remained ample and the average local market premium traded at flat

At the last monetary policy meeting held in October, the Reserve Bank of India (RBI) maintained its accommodative stance and kept its policy repo rate unchanged at 4%

Explore India's gold market in September: gold prices, retail demand, RBI purchases and more!

Explore India's gold market last month - the domestic gold price, retail demand, import data and more!

Retail demand was mixed in June: moderate strength in the first half of the month was followed by a softening of demand in the second half due to an absence of wedding dates. Official imports rebounded with easing of lockdown restrictions and the local market flipped back to discount as demand softened from mid-July onwards

Summary

• The domestic gold price ended 5.1% higher in May at Rs48,993/10g 
• Retail demand collapsed amid COVID-induced lockdowns in the country 
• Indian official imports slowed and the local market flipped to discount 
• Monthly inflows into gold ETFs slowed as higher returns lured investors towards the equity market. Total holdings for Indian gold-backed ETFs (gold ETFs) reached 33.2t by the end of May; a net inflow of 0.1t (Rs2.9 bn; US$39mn)
• The Reserve Bank of India (RBI) added 0.9t of gold to its reserves in the month increasing its total gold reserves to 696.2t.