India gold market update: Cautious festive optimism | Post by Kavita Chacko | Insights - World Gold Council

AI desk brief

India’s gold market cooled after August’s sharp rally: LBMA Gold Price PM jumped 13% in August to US$4,386/oz, then fell 3.9% in September, while domestic prices rose 12% in August to INR158,854/10g before slipping 4.6% this month. The price swing widened local discounts to import parity from US$34/oz in July to US$51/oz in August and US$78/oz by 11 September, indicating ample domestic supply and softer discretionary jewellery demand.

Despite the pullback, wedding-related buying has remained resilient and physical investment demand steady, while Indian gold ETFs stayed in net inflow territory: August inflows rose 67% m/m to INR25.97bn (US$272mn), holdings increased 1.6t to 121.3t, and AUM reached INR1,912bn (~US$20bn). Digital gold buying also held firm at about INR25bn (US$262mn) per month from June to August, and MCX gold futures turnover hit a five-month high at INR295bn/day with volumes up to 19t/day, though imports fell 45% m/m to US$2.3bn as existing supply met demand.