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Informist, Thursday, Jul. 30, 2026

 

MUMBAI – Supply of gold in the June quarter dropped to a six-year low in India due to lower bullion imports, the World Gold Council said in a report. The decline in supply was attributed to the hike in import duty by nine percentage points to 15% in May. Gold supply fell to 120 tonnes in the reporting quarter, below the 16-year average of 234 tonnes.

 

Net bullion imports declined to 98 tonnes, down 22% on year and 53% from the trailing quarter. Nonetheless, supply remained adequate to meet demand due to enough inventories and recycled gold, it said, adding that lower supply reflected softer demand rather than a shortage in the domestic market.

 

Gold prices were pushed higher by low imports and depreciation of the rupee, putting weight on demand for the yellow metal, WGC said. Prime Minister Modi's appeal to curb gold purchases further reduced demand. Indian gold demand softened in Apr-Jun to 131 tonnes, down 6% on year, but spending on gold touched a record in the reporting quarter, rising 50% on year to INR 1,979 billion.

 

The jewellery demand rose 34% on year, reflecting the nearly 60% on-year rise in gold prices. Jewellers also reported higher exchange-led purchases as consumers opted for lighter, lower-carat jewellery.

 

Investment demand, comprising bars, coins and exchange-traded funds, eased to 54 tonnes in the quarter from an average 100 tonnes over the previous three quarters but remained above the long-term quarterly average of 49 tonnes. Bar and coin demand fell 19% sequentially to 50 tonnes, while ETF demand moderated to 4 tonnes after a record first quarter.

 

Net recycling fell to 19 tonnes, the lowest in 11 quarters, despite higher domestic prices, as holders preferred monetising their gold through loans rather than selling it. Gold loans are now the second-largest retail lending segment after housing, according to WGC

 

The World Gold Council said gold demand is likely to remain sensitive to price movements. Wedding and festival-related buying is expected to support purchases through the rest of the year, although high prices may continue to weigh on jewellery demand. Investment demand is expected to remain positive but will depend on the direction of gold prices.

 

The council warned that a weaker-than-normal monsoon and further increases in domestic prices could weigh on gold purchases.  End

 

US$1 = INR 95.68

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

 

Reported by Somen Bose

Edited by Deepshikha Bhardwaj

 

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