India’s Gold Imports Hit A 3 1/2 Year High

(October 7, 2024 - Heraeus Precious Metals)

Strength in consumer demand and industry restocking ahead of Diwali and the rest of the festive season in Q4 saw India’s gold imports surge to a more than three-year high of 125 tonnes in August. This marks an increase of 58% year-on-year and 212% month-on-month. Imports were supported by cuts in import tariffs on precious metals in July. Consumers who were delaying purchases of jewellery and bullion owing to the rising gold price in H1’24 likely took the lowering of tariffs as an opportunity to spend.

The local price of gold in India averaged a discount of $8.2/oz during August, though following a big swing from discount to premium in late July, the market appears to be more normalized, with steady demand above the pre-tariff reduction levels (source: World Gold Council). Any correction in the gold price is likely to lead to restocking by retailers, which will keep import volumes elevated. India is the second-largest consumer gold market and accounted for 761 tonnes of consumer demand last year. Based on year-to-date import figures, demand could rise by ~10% this year, taking demand above 800 tonnes for the first time since 2015. Despite tensions in the Middle East boiling over in the last week, the gold price was little changed and continued to consolidate at around $2,650/oz.