Gold News

Household Gold Investing Beats Speculation as India's Festive Spending Grows

GOLD INVESTING demand in India was expected to rise by value on Friday's Akshaya Tritiya festival compared to last year's event as global gold prices rebounded towards last month's record highs.
The 3pm benchmark auction in London, heart of the world's bullion trading and storage network, fixed close to $2370 per Troy ounce, more than 3.1% above last Friday's finish.
The highest weekly close in three, that was barely $30 below Friday 12 April's all-time record London gold benchmark of $2401.
"Speculative investors have led most of the past rallies," says the Nikkei Asia newspaper, quoting commodity researcher Tsutomu Kosuge at Tokyo consultancy Marketedge.
That makes this year's "historic March-April rally an unusual example of physical gold demand from China pushing the market higher."
Today's Hindu festival of Akshaya Tritiya will see India's household jewelry and investing demand – the world's 2nd largest behind China – come in 10-20% below this period last year, reckons Harshal Barot, senior consultant for South Asia at specialist analysts Metals Focus.
But with Rupee and Dollar gold prices sharply higher since last Akshaya Tritiya – second only to the autumn festival of Diwali for Indian gold buying – "You might still be there or thereabouts compared to last year in value terms."
Chart of India's household gold demand, rolling 4-quarter total by weight and US$ value. Source: BullionVault
Slipping 4.1% by weight in 2023, India's gold jewelry demand set a new calendar-year record by value above $35.9 billion based on data compiled for and published by the mining industry's World Gold Council, doubling from the Covid Crisis low of 2020.
Retail gold bar and coin investment demand rose faster, however, expanding 15.0% by Dollar value at global prices and rising 6.7% by weight.
Combined, the value of India's consumer demand then rose 18.4% across January-to-March from the same period last year, more than twice the pace of growth in the bullion content of jewelry and retail investing product purchases.
"Light weight jewellery, coins and bullion is expected to see more buyers this season," the Times of India quotes one retailer in Pune.
"While the sale of gold in value terms is likely to surpass last year's levels due to increased rates, we also foresee an increase in sales volume," says another.
"We have had good footfall this week," adds a third, "and people have also pre-booked jewellery. We expect revenue sales to be higher by 10-12% this year as compared to last year."
Ahead of Friday's pop in global gold prices, trading volumes rebounded on the Shanghai Futures Exchange, jumping by almost 2/3rds from yesterday and doubling from Monday.
Volumes at the Shanghai Gold Exchange also jumped, rising for the first time this week, more than doubling from Thursday and reaching the highest since the day of April, before China's Labor Day holidays.
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Western speculation and demand to invest in gold held weak in contrast, with the giant GLD gold ETF shrinking for the 1st week in 4, while the SLV silver trust shrank for the 2nd week in a row.
Silver bullion and investing prices in London today fixed at $28.65 per Troy ounce at midday, adding another 7.0% to last week's 9.1% rebound with the highest weekend finish since 12 April's 3-year high above $29.

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

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