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Informist, Thursday, Jul 18, 2024

 

MUMBAI – Demand for gold jewellery is anticipated to primarily revolve around the festival season beginning in August, Kavita Chacko, India research head, World Gold Council, said in a note. Demand for gold coins and bars is also anticipated, she said.

 

The period from mid-May to July typically tends to be slack for jewellery purchases, she said. "A potential revival in demand is expected with the onset of the festival season in the latter part of Q3 (Jul-Sep)," she added.

 

"Seasonal factors and high prices have dampened the demand for gold jewellery," Chacko said. However, reports show persistent demand for gold bars and coins, "with indications of a likely shift from jewellery to bars and coins for some consumers", she said.

 

So far this year, global and domestic gold prices have gained 16%, Chacko said. While jewellery demand was subdued, inflows into gold exchange-traded funds and imports of the precious metal continued in June. Investment demand into gold was also dominant, the research head said.

 

Gold prices retreated in June from their May peak, marking the first monthly decline, albeit a modest 0.8%, in four months. Prices, however, remained above the significant threshold of $2,300 per oz, which was breached in April.

 

The discount on the domestic gold price to international price was range-bound at $1-$12 per oz but widened to $50 per oz in early July, mainly owing to more supply amid subdued demand in domestic markets, she said.  

Meanwhile, inflows into Indian gold ETFs maintained their momentum in June, Chacko said. "During the month, Indian gold ETFs recorded net inflows totalling 7.3 bln rupees, significantly surpassing the 12-month average of 4.5 bln rupees. Except for April 2024, these ETFs have consistently seen sustained inflows since April 2023," she added.

 

On Wednesday, gold prices on COMEX hit an all-time high due to rising expectations of a 25-basis-point rate cut by the US Federal Reserve in September. The most-traded August gold contract on COMEX hit an all-time high of $2,488.4 per oz, up nearly 1% from its previous close. At 1616 IST, the most-active August gold contract on COMEX was up 0.4% at $2,471 per oz.  End

 

US$1 = 83.65 rupees

 

Reported by J. Navya Sruthi

Edited by Rajeev Pai

 

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