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Informist, Friday, Aug. 21, 2026

 

MUMBAI – Gold demand in India is improving, raising expectations of a strong festive season, though higher prices could continue to weigh on jewellery purchases, Kavita Chacko, research head for India at the World Gold Council, said in a report. Investment demand remains supportive, with gold exchange-traded funds continuing to attract inflows.

 

Jewellery demand has strengthened as consumers responded to lower and more stable prices, while deferred purchases returned to the market, resulting in higher footfall and a recovery in demand beyond essential wedding-related purchases, according to Chacko. Manufacturers have also reported higher order flows and jewellers have begun replenishing inventories ahead of the festive season.

 

Gold ETF inflows saw higher inflows this month after a fall in July, Chacko said. Gold ETFs attracted around INR 11.79 billion in net inflows in the first two weeks of August, Chacko said, citing data from the Association of Mutual Funds of India. Gold ETF net inflows had more than halved on month to INR 15.59 billion in July. Investor participation grew as 57,000 new accounts were added in July, taking the total number of accounts to 12.53 million.

 

India's gold imports in July rebounded after two consecutive months of lower imports, she said. Gold import value more than doubled to $4.16 billion in July from $1.97 billion in June. Import volumes were estimated at 40–45 tonnes for the month, up from 20 tonnes in June, indicating firmer physical demand and inventory replenishment. The government had hiked the import duty on gold to 15% from 6% in May.

 

"Following a sharp price correction in June, gold prices stabilised during July before recovering in early August, reaching their highest levels in over two months," Chacko said. International gold prices rose 9% in the first fortnight this month, while domestic prices rose nearly 7%. Easing rate hikes concerns by the US Federal Reserve, a weak dollar, and renewed inflows into gold ETFs contributed to gold price recovery, following a slump in June. The domestic price rise was partially offset by strengthening of the rupee against the dollar. The price of a dollar-denominated commodity decreases in the domestic market when the rupee appreciates against the dollar.

 

Meanwhile, trading in gold futures picked up in July, following a soft Apr-Jun, indicating greater trader participation and hedging activity as gold prices stabilised and began to recover, Chacko said. Average daily trading volumes on the Multi Commodity Exchange of India rose to 14.9 tonnes from an average of 13.5 tonnes over the previous three months. 

 

At 1320 IST, the most active October gold contract on MCX was at INR 160,802 per 10 grams, up 0.9% from Thursday. On COMEX, the most active December futures contract was up 1.1% at $4,622.4 per ounce.  End

 

US$1 = INR 95.74

 

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

 

Reported by Somen Bose

Edited by Avishek Dutta

 

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