India gold market update: Seasonal demand shows early strength | Post by Kavita Chacko | Insights - World Gold Council

AI desk brief

India’s gold market is showing early festive-season strength: domestic discounts have narrowed sharply from an average US$66/oz in September to US$8/oz by 16 October as lower prices and seasonal buying improved physical demand. Gold remained rangebound in October after September’s 8.5% monthly drop to US$4,176/oz, with higher UST yields, a stronger dollar and lighter futures positioning weighing on prices, while domestic weakness in the INR cushioned the fall.

Investment demand also firmed. Indian gold ETF net inflows hit a seven-month high in September at INR44.5bn (US$466mn), adding nearly 3t to holdings and lifting cumulative AUM to 124t, with inflows continuing into mid-October. The WGC says the temporary suspension of fresh subscriptions into gold mutual fund FoFs should have only a modest near-term effect, as the measure does not affect existing SIPs or direct ETF functioning; Jan-Sep ETF demand totalled 29t, about 7% of gold imports.