A new report from the World Gold Council shows that India’s gold market is entering the festive and wedding season, with growing signs of a revival in jewelry demand, supported by stable prices and continued investment inflows into the precious metal.
Prices Rise, Discounts Narrow
Global gold prices posted modest gains in August, rising by more than 1% to $3,335 per ounce, following a slight increase in July. Despite ongoing volatility driven by tariffs, geopolitical risks, and inflation concerns, the metal has remained range-bound, yet continues to be one of the best-performing assets of 2025, up 28% year-to-date.
In the domestic market, a weaker rupee amplified price gains, pushing gold to INR 99,665 per 10 grams by mid-August, a 31% increase since the start of the year. At the same time, local market discounts narrowed sharply—from $27/oz in June to just $3.7/oz in mid-August—as demand improved.
Jewelers Stock Up for Festive Sales
At the recent India International Jewellery Show (IIJS), optimism among manufacturers and retailers was evident, with reports of stronger demand and increased orders from both large chains and independent outlets. Retailers who had cut back on inventories earlier this year have begun restocking in anticipation of higher festive sales, while some manufacturers are focusing on lighter-weight jewelry to attract more price-sensitive buyers.
Gold ETFs Attract Investors
Gold exchange-traded funds (ETFs) in India recorded positive inflows for the third consecutive month in July, although the pace slowed to INR 12.6bn ($146mn), down 41% from June. Even so, inflows remained well above the 2024 average. Assets under management rose to INR 676bn ($7.85bn), up 96% year-on-year, with total gold holdings increasing to 68 tonnes after a 1.2-tonne addition in July. One new ETF was launched during the month, bringing the total number of listed gold ETFs in India to 21.
Central Bank Holds Reserves Steady
The Reserve Bank of India (RBI) kept its gold reserves unchanged at 880 tonnes in July, following a small addition in June. While cumulative purchases this year stand at just 4 tonnes—well below the 40 tonnes added during the same period in 2024—gold now accounts for 12% of India’s foreign exchange reserves, a record high.
Imports Surge Ahead of Festive Demand
Gold imports jumped to $4bn in July, well above the first-half monthly average of $3bn, marking a 14% year-on-year increase and more than double June’s levels. The Council estimates import volumes at 42–48 tonnes, indicating that traders are stocking up in preparation for the anticipated surge in seasonal demand.
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