India's Gold Market Sees Signs of Recovery Amid Weaker Dollar

India's gold market is showing signs of recovery after a sharp correction in June, according to the World Gold Council's latest report. The report attributes the recovery to shifting monetary policy expectations, a weaker US dollar, and renewed inflows into gold ETFs.

The price correction appears to have been exactly what the market needed, with jewellery demand strengthening as consumers viewed recent price action as a buying opportunity. Deferred purchases returned to the market, resulting in higher footfall and a recovery in demand beyond essential wedding-related purchases.

Manufacturers have begun receiving higher order flows, and inventory replenishment by jewellers has picked up ahead of the festive season, suggesting growing confidence in seasonal demand. The report also notes that old gold exchange remains elevated and continues to play an important role in facilitating purchases.