India’s gold market is showing signs of recovery in August as prices rebound, jewellery demand improves and retailers rebuild inventories ahead of the festive season, World Gold Council says

As India raises gold import duty from 6% to 15% amid economic pressure and a weakening rupee, the jewellery industry is preparing for higher prices, evolving demand, and possible market disruption, discovers Khursheed Mistry.

As Dhanteras and Diwali draw near, Indian consumers are actively purchasing gold despite record-high prices, driven by hopes for strong returns amid a cooling stock market. This surge in demand may further elevate global gold prices and impact India's trade balance, indicating a robust festive buying sentiment

This Rakshabandhan, gold retailers across India celebrated a substantial increase in sales, as consumers took advantage of reduced domestic prices following the recent import duty cut

Jewellery stocks continued their upward momentum for a second straight day on Wednesday as investors responded positively to the reduced customs duties

In India, anticipation of potential import duty cuts in the upcoming budget adds further complexity to market dynamics, while in China, retail and wholesale demand reflect the strain of elevated prices

The surge in gold prices might dampen the demand during the Indian wedding season, while the outlook remains robust in China

The yellow metal price is hovering at Rs 63,060 per 10 grams on the commodity stock exchange MCX and around $2,058 an ounce in the international market at a time the rupee is trading above 83 against the dollar

Sustained high gold prices are likely to hike revenues of organised gold jewellery retailers by 16-18 per cent this fiscal, a report said on Thursday

The World Gold Council has forecasted that a record amount of used gold jewellery will likely be sold in India, reflecting the growing trend of individuals leveraging the advantageous market conditions to unlock the value of their assets.

The country imported 14.6 tonnes of gold in January 2023, down from 61.5 tonnes in January 2022. The lower demand for gold has affected not only India's import figures but also global gold prices, which fell on the news of India's reduced imports.

Gold edges higher in Indian market hovering near an all-time high

Retail demand has been weak across the country for the past few days

Dealers were charging a premium of up to $2 an ounce over official domestic prices, inclusive of 10.75% import and 3% sales levies, compared to last week's $3 premiums