WGC: Price Stability to Prompt Resurgence in Indian Gold Demand

SEATTLE (Scrap Monster): The World Gold Council (WGC) published its latest India Gold Market Report.

Despite pressure from demand, gold maintained its gains, according to Kavita Chacko, Research Head-India at WGC. With gold prices reaching a new high of US$3,500/oz in April—the fourth consecutive month of gains—the trend picked up speed. A declining US dollar, increased economic and geopolitical unpredictability, and significant inflows into international gold exchange-traded funds (ETFs) were the primary causes of the price spike. Since then, though, prices have declined; as of now in May of this year, the LBMA price has dropped by 8%.

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With the exception of the day of Akshaya Tritiya, the country's gold jewelry sales were muted in April and early May due to the incredibly high and unstable gold prices. According to the WGC research, buyers were observed postponing their gold purchases, choosing lightweight jewelry, or waiting for price stability.

Indian gold ETFs had net outflows in April for the second consecutive month. A month ago, the total gold holdings across the 20 gold ETFs were 64.4t, a slight decrease of 0.07t. Nonetheless, the cumulative assets under management (AUM) of gold exchange-traded funds (ETFs) increased to around $7.2 billion as a result of the high gold prices.

According to WGC, future price stability for gold is probably going to lead to a rise in demand for the yellow metal.