Stronger-than-expected festive buying interest

 

The gold jewellery market gears up for the festive at latch!  

Kavita Chacko, Research Head, India-World Gold Council [WGC] gaze the festive sentiment in India. She said, Signs of demand revival are emerging as the gold jewellery market gears up for the upcoming festive and wedding season (from early August to year-end). Anecdotal reports from industry stakeholders suggest a positive outlook. This optimism was evident at the recent India International Jewellery Show (IIJS), the country’s largest jewellery trade fair. [Reader’s Note: IIJS is the 2nd largest global gem & jewellery show.]  

As per anecdotal reports from the event, many manufacturers reported stronger-than-expected buying interest and a noticeable pickup in orders from both large chain stores and independent retailers. Retailers who had been cautious about their inventories in recent months due to lacklustre demand reported active restocking in anticipation of improved festive sales. And gold price stability also reportedly supported buyer sentiment. 

Furthermore, to appeal to price sensitive customers and to drive volumes, manufacturers are focusing on lighter- weight jewellery. Meanwhile, market reports suggest that investment demand for physical gold, i.e. bars and coins, remains healthy.  

Looking at, the Positive flows and expansion in gold ETFs, Kavita Chacko said; flows into Indian gold ETFs remained positive in July, marking the third consecutive month of net inflows. Global policy related uncertainties and geopolitical tensions have been major drivers of this trend. But, the pace of net inflows slowed, declining to INR12.6bn (US$146mn) in July, down 41% from the previous month.  

This was broadly in line with our initial estimate and nearly 34% higher than the 2024 monthly average of INR 9.4bn. The positive momentum has carried into August, with partial data for the first two weeks indicating higher inflows into Indian gold ETFs. At the end of July Indian gold ETFs’ cumulative assets under management (AUM) stood at INR676bn (US$7.85bn), a 96% y/y increase.  

Total gold holdings rose to 68t, with 1.2t added during the month. Investor interest in gold ETFs continues to strengthen as indicated by the steady growth in new accounts (folios); 215k new folios were added in July, bringing the total to 7.86mn, a 42% y/y increase.





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