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Informist, Saturday, Oct. 18, 2025

NEW DELHI – Gold prices continued their extraordinary rally through September and the first two weeks of October, with domestic premiums rising sharply amid strong investment and jewellery demand, the World Gold Council said in a report. The festive season has started on a firm footing, supported by record inflows into gold exchange-traded funds and healthy sales reported by listed jewellers, the report said. 

Gold imports rose to a ten-month high in August, driven by seasonal buying and investment demand, while expectations of a strong festive season remain high across the gold trade, the report said. Demand continues to be supported by investment purchases and wedding jewellery, even as the broader jewellery market faces challenges from rising prices, it said. Increased disposable income, following GST cuts and a low-inflation environment, may further aid demand, it added.

Gold has continued its record-breaking performance, reaching 48 all-time highs so far this year. Geopolitical tensions, strong investment demand, dollar weakness, financial market risk, and expectations of a dovish Federal Reserve policy lifted international prices by 11.6% in September and by an additional 7.9% in the first two weeks of October, pushing past the $4,000 per ounce milestone, the report said. 

"The increase from $3,500 to $4,000 occurred in just 36 days, contrasting sharply with earlier $500 increments, which took over three years on average," the report said. International gold prices have now risen 58% year-to-date, marking the largest increase in 45 years, with domestic prices having moved in tandem, rising 66% year-to-date, with the gains further amplified by the weakening Indian rupee, it said. 

The festive season has begun on a positive note, the report said, with strong demand for both physical investment products and jewellery. The record rally in gold prices has drawn investor attention and sustained interest in physical gold, leading to an increasing share of investment demand within overall domestic gold consumption, the gold council report said.

"Despite pressure on jewellery consumption from high prices, there has been a sales uptick, largely concentrated around wedding purchases. Consumers are opting for lighter-weight, lower-carat pieces, affecting overall retail volumes," it said. The council sees retailers' revenues rising from this trend, even as total volumes decline due to affordability constraints.

Retailer feedback indicates that large chain stores are seeing demand for lighter, lower-carat jewellery, while high-end independent stores catering to wedding customers are experiencing strong sales. Smaller stores, however, are facing weaker footfall and declining sales.

Meanwhile Indian gold exchange-traded funds recorded their largest-ever monthly net inflows in September, totalling INR 83.6 billion -— a 282% increase month-on-month, the report said. "This translated to an additional 7.4 tonnes of gold demand, marking the strongest month on record."

The sustained gold price rally and safe-haven demand contributed to the surge in inflows. The report cited data from the Association of Mutual Funds in India to show that gold ETF assets under management reached an all-time high of INR 901.4 billion, while total holdings rose to 77.4 tonnes, with one-tenth added in September alone.

Investor participation also reached record levels, with 629,000 new accounts added in September, taking the total to 8.66 million, a 33% increase since the start of the year. Early October data indicates continued momentum, with INR 52.81 billion in net inflows during the first ten days of the month.

The report said that in September, based on estimates from the Reserve Bank of India's weekly data, the central bank added 0.2 tonnes to its gold reserves, bringing total holdings to 880.2 tonnes. While RBI purchases this year have been muted — with 4 tonnes added in the first nine months versus 50 tonnes during the same period last year — the share of gold in India's foreign exchange reserves has risen to 14% from 9%, largely due to valuation gains from higher gold prices, the report highlighted.

At 1143 IST, the December contract of gold on COMEX was at $4,267.9 per ounce, down 0.85% from its previous close.  End

US$1 = INR 87.97

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

Reported by Pallavi Singhal

Edited by Vandana Hingorani

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