More Stories

Informist, Wednesday, Aug. 20, 2025

 

MUMBAI – There are signs of a revival in demand for gold jewellery in India as market gears up for the upcoming festival and wedding seasons, said Kavita Chacko, the World Gold Council's Research Head, India, in a report Wednesday. Overall demand for the precious metal could also receive a boost in the coming months with investment interest holding firm, Chacko added.

 

As per anecdotal reports from the India International Jewellery Show, many manufacturers reported a stronger-than-expected buying interest and a noticeable pick-up in orders from both large chain stores and independent retailers, Chacko said. "Retailers who had been cautious about their inventories in recent months due to lacklustre demand reported active restocking in anticipation of improved festive sales," Chacko added. Moreover, manufacturers are focusing on lighter-weight jewellery to appeal to price-sensitive customers and to drive volumes.

 

Stability in gold prices has also reportedly supported buyer sentiment, Chacko said. Gold prices showed renewed strength this month, with international gold prices rising over 1% in the first half of August to reach $3,335 per ounce, building on the modest 0.3% gain in July. A weaker dollar, expectations of an interest rate cut by the US Federal Reserve, and ongoing tariff developments have driven prices this month. However, overall price movement has remained range bound, Chacko added.

 

In India, a weaker rupee against the dollar has amplified gains in gold prices. Gold prices have risen 1.6% month-to-date to INR 99,665 per 10 grams as of Thursday. "Importantly, signs of improving demand have led to a narrowing of domestic market discounts--from an average of $27/oz in June to $3.7/oz as of mid-August."

 

Indian gold exchange-traded funds reported the third consecutive month of net inflows in July. Geopolitical tensions and global policy-related uncertainties were the major drivers of the inflows, Chacko said. However, the pace of net inflows slowed, declining 41% on month to INR 12.6 billion in July. Chacko said that the positive momentum has continued in August, with data for the first two weeks indicating higher inflows into Indian gold ETFs.

 

The cumulative assets under management of Indian gold ETFs rose 96% on year to INR 676 billion as of Jul. 31. Total gold holdings rose to 68 tonnes, with an addition of 1.2 tonnes during the month. "Investor interest in gold ETFs continues to strengthen as indicated by the steady growth in new accounts (folios)," Chacko said. In July, 215,000 new folios were added, taking the total to 7.86 million. One new gold ETF was launched in July, taking the total number of gold ETFs listed in India to 21.

 

The Reserve Bank of India did not add to its gold reserves in July, following a modest 400 kg addition in June. The RBI has increased its gold reserves by 4 tonnes in the first seven months of the year, compared with the 40 tonnes bought during the year-ago period. "We believe that this suggests a measured approach in the RBI's gold reserve management amid significant gains in the gold prices. Despite the slowdown, RBI's gold holdings remain at a record high of 880 t (tonnes), now accounting for 12% of its foreign exchange reserves, up 4% y/y," Chacko said.

 

Gold imports into India saw a significant rebound in July after three months of decline. Gold imports in July were at $4 billion, surpassing the monthly average imports for the first six months of the year. Chacko expects the volume of gold imported in July to range from 42–48 tonnes. "The higher import levels suggest that manufacturers are likely preparing for festive season demand, beginning in August," Chacko added.  End

 

US$1 = INR 87.06

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.