India's Festive Season Kicks Off with Cautious Tone Amid Price Volatility
India's festive season started cautiously in August due to price volatility, but physical gold investment remained steady. According to Kavita Chacko, Research Head for India at the World Gold Council (WGC), Indian jewelry buying was resilient despite the price fluctuations. Domestic discounts widened from $34/oz in July to $51/oz and further to $78/oz as of September 11.
The gold ETF market saw inflows of $272 million in August, a 67% month-over-month increase. Holdings increased by 1.6t, taking cumulative ETF holdings to 121.3t. The World Gold Council expects demand to improve during the festive and wedding season, supported by steady investment demand and resilient wedding-related buying.
Gold futures volumes on the Multi-Commodity Exchange (MCX) rose 27% month-over-month in August to 19t. Imports into India dropped dramatically last month, falling 45% month-over-month and 58% year-over-year to $2.3 billion.