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Informist, Monday, Nov. 18, 2024

 

MUMBAI – Demand for gold is likely to rise due to the recent correction in price of the precious metal and amid the wedding season from November to March, said Kavita Chacko, World Gold Council research head (India), in a report Monday. The bullish sentiment in gold is likely to sustain investment interest amid ongoing volatility in equity market, she added.

 

Market reports indicate higher footfall at jewellery stores and robust buying of coins from online and offline platforms. Jewellers have undertaken promotional events and marketing campaigns to lift sales. Anecdotal reports suggest that auspicious 'token' purchases were broad-based, spread across regions and demographics. "Despite a year-on-year drop in the volume of gold sold, the value of sales increased, driven by the higher price," she said.

 

Gold prices in the domestic market have been at a slight discount to international prices since mid-August, reflecting a balanced demand-supply dynamic. With the sharp import duty cut in July, the flow of smuggled gold into the country has almost ceased, making way for official imports. "The average monthly discount narrowed from $5 per ounce in September to $2.8 per ounce in October, before tapering to $1 per ounce in the first week of November," Chacko said.

 

Indian gold exchange traded funds continued to attract strong inflows in October, fuelled by a favourable gold price momentum and increased volatility in domestic stock market. The long-term capital gains benefit announced in July provided a continued boost, as reflected in the significant rise in inflows, she said.

 

Net inflows in October rose by 58% on month to $233 million, the highest on record, pushing the total assets under management for Indian gold ETFs to a new high of $5.3 billion. The net inflows in gold ETFs during the first 10 months of 2024 reached $1.11 billion against $301 million in the same period last year. 

 

Indian mutual funds' gold holdings reached 54.5 tonnes, having added 12.2 tonnes so far in 2024. End

 

US$1 = INR 84.38

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Sandeep Sinha

Edited by Deepshikha Bhardwaj

 

 

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