WGC: India Gold Demand Took a Pause After Festival Rush

SEATTLE (Scrap Monster): The latest India gold market update published by the World Gold Council (WGC) indicates that the demand for gold in the country took a pause after heavy festival rush.

The prices of the yellow metal surged to hit new all-time high in mid-May, before falling back, likely on profit taking. Following 9% and 5% monthly gains in March and April respectively, gold prices extended gains marginally by 1% during the previous month. The domestic gold prices in India continued to move closely with the international prices, WGC report noted.

The country witnessed a positive momentum in gold demand around the Akshaya Tritiya festival in early-May this year, thus this was rather short-lived. The gold purchases, especially jewellery, slowed down afterwards. The current trend of subdued demand is likely to continue in the short term. Meantime, the demand for gold bars and coins remained steady, driven by positive consumer sentiment towards gold as an attractive investment bet despite recent surge in prices.

The inflows into Indian gold ETFs resumed in May this year. The significant month-on-month jump in the number of gold ETF folios by 136,772 to touch 5.3 million demonstrates ongoing investor interest in gold as a financial asset.