WGC India Gold Market Update reports that as  the festive and wedding season approaches there are signs that gold jewellery demand is gaining momentum, and with investment interest holding firm, overall gold demand could receive a boost.

Highlights from the report:

• Gold steady with gains in August; discounts narrow in India
• Retailers gear up for festive boost, ramping up inventories
• Positive inflows and one new fund entry drive continued gold ETF growth
• RBI holds steady on gold reserves in July
• July’s gold imports surge, bracing for festive demand.

Overall price movement has remained range-bound. Despite short-term fluctuations, gold continues to outperform in 2025, delivering a 28% return in US dollar terms year-to-date.

Price Trends:
International gold prices rose over 1% in the first half of August to US$3,335/oz, extending July’s modest gains. Prices remain range-bound, influenced by factors such as a weaker US dollar, Fed rate cut expectations, inflation concerns, and tariff developments. Year-to-date, gold has delivered a strong 28% return in US dollar terms. In India, a weaker rupee has amplified gains, with domestic prices up 31% YTD to INR 99,665/10g. Discounts in the domestic market narrowed sharply in August, reflecting improved demand.

Jewellery Demand:
The jewellery sector anticipates a rebound during the festive season. At IIJS 2025, manufacturers reported stronger-than-expected orders, with retailers restocking in anticipation of robust sales. Stability in prices has improved consumer sentiment, while manufacturers are increasingly offering lightweight jewellery to appeal to price-sensitive buyers.

Investment Flows:
Indian gold ETFs witnessed a third straight month of inflows in July, totalling INR12.6bn, though at a slower pace than June. Assets under management rose 96% y/y to INR676bn, with holdings reaching 68t. Investor participation remains strong, with rising folios and the launch of new funds.

Imports and Reserves:
Gold imports surged to US$4bn in July, suggesting stocking ahead of the festive season. Meanwhile, RBI’s gold reserves remained unchanged at 880t, reflecting a cautious stance amid high prices.