More Stories

Informist, Tuesday, May 20, 2025

 

MUMBAI – Stability in gold prices could prompt a resurgence in demand in India, World Gold Council Research Head (India) Kavita Chacko said in a report. Consumer sentiment is that the downside to gold prices is limited, which would reinforce gold's appeal as a reliable investment, Chacko said.

 

Since surging to a record high of $3,500 per ounce in April, gold prices have retreated around 8% as of May 14. In India, gold prices have fallen 5%, cushioned by the appreciation in the rupee, Chacko said.

 

Sales of gold jewellery in India remained subdued in April and early May, except on the day of Akshaya Tritiya, due to high and volatile gold prices coupled with broader economic uncertainties. Consumers were deferring their purchases, waiting for price stability, or opting for lighter-weight jewellery to accomodate fixed budgets and need-based buying, Chacko added.

 

On Akshaya Tritiya, which traditionally drives gold purchases, large and corporate retailers reported higher footfalls and sales, driven by aggressive promotional and marketing campaigns. However, small and independent jewellers saw a sharp drop in demand. Gold bars and coins performed better than jewellery, with low weight coins of 5 gram proving popular, Chacko said. "This behaviour highlights a growing consumer shift towards organised players and investment-oriented gold products," Chacko added.

 

Indian gold exchange-traded funds recorded net outflows for the second consecutive month in April. Redemptions hit a record high of INR 16.69 billion in April, suggesting profit-taking with gold prices touching fresh record highs during the month, Chacko said citing data from the Association of Mutual Funds in India. Gold ETFs saw gross inflow of INR 16.63 billion in April, while net outflows were at INR 58.20 million.

 

In the first four months of 2025, the Reserve Bank of India added 3.4 tonnes of gold to its reserves, lower than the 24.1 tonnes purchased in the corresponding period last year. The RBI's gold reserves remained at a historic high of 879.6 tonnes as of April-end, unchanged from the previous month, Chacko said. "In value terms, gold now makes up 12% ($81.8 billion) of India's total forex reserves, marking a 4% increase from a year ago and the highest share on record. This underscores the growing strategic importance of gold in the management of forex reserves," Chacko added.

 

India imported $3.1 billion of gold in April, nearly a third lower than March, but 5% higher on year, Chacko said citing data from the Ministry of Commerce. "This points to continued underlying demand, even in a high-price environment, given that gold imports into the country are on consignment basis by nominated banks and agencies," Chacko said. Import volumes in April were in the range of 30-36 tonnes, down from 51 tonnes in March, Chacko added.  End

 

US$1 = INR 85.51

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

 

Reported by Ashutosh Pati

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.