India's Gold Demand Rebounds Ahead of Festive Season

The World Gold Council has reported that India's gold market is showing signs of recovery, driven by improving jewelry demand and investment appetite. The international gold price rose by around 9% in August to $4,391 per ounce, while domestic prices in India gained nearly 7% to INR151,744 per 10 grams as of August 14.

The appreciation of the Indian rupee against the US dollar partially offset the rise in international prices, limiting gains in the domestic market. Jewellery demand has strengthened as consumers viewed the recent decline and greater stability in prices as an opportunity to buy.

Manufacturers have begun receiving stronger order flows, while jewellery retailers are rebuilding inventories ahead of the festive season. The exchange of old jewellery for new pieces continues to play an important role in the market, providing consumers with an additional means of financing new purchases while increasing the availability of gold in the domestic market.

Gold ETFs recorded net inflows of around $163 million in July, down 55% from the previous month. The value of gold imports surged to approximately $4.16 billion in July, more than double the $1.97 billion recorded in June.