A Clear Divergence in Asian Gold Markets: Limited Recovery in India and Demand Pressure in China

A recent report issued by the World Gold Council revealed a clear divergence in the performance of major Asian gold markets, particularly India and China, over the recent period, amid continued pressure from global price volatility, geopolitical tensions, and shifting consumer and investment behavior across both markets.

The report indicated that the Indian market witnessed a relative improvement in gold demand in recent weeks, supported by the approach of a major festive season in the country, during which gold plays a central role in jewelry and culturally significant purchases. As a result of this seasonal uplift, local gold premiums rose to around $9 per ounce above the global price, reflecting a modest increase in retail buying activity ahead of the seasonal demand period.

Despite this improvement, the report noted that overall demand strength remained limited compared to typical seasonal averages, as elevated local prices—reaching nearly 152,800 rupees per 10 grams—continued to weigh on consumer appetite. This price pressure significantly constrained purchasing volumes, even as seasonal sentiment improved.

In contrast, the Chinese market recorded weaker performance in consumer demand for gold jewelry, with premiums declining to a range of $3 to $5 per ounce, signaling subdued demand conditions, particularly in the jewelry segment, which is highly sensitive to changes in household income and discretionary spending.

According to the World Gold Council, this weakness in China is linked to a broader slowdown in economic activity and softer consumer spending, although investment demand for gold remained present at certain intervals, albeit in a more uneven and inconsistent manner.

The report concluded that both the Indian and Chinese markets continue to be influenced by a combination of key factors, primarily elevated global gold prices, which are constraining consumer demand, alongside seasonal drivers in India that provide temporary support without altering the broader short-term trend.