India’s gold imports surge on hopes of revival in jewellery demand
Jewellers are expecting the recent up tick in demand will sustain in the coming days as gold prices are expected to take a breather with the trade war triggered by the US settles down.
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REUTERS
Gold imports have more than doubled to 52 tonnes in March against 15 tonnes in February despite sharp rally in gold prices amid growing global uncertainty.
Jewellers are expecting the recent up tick in demand will sustain in the coming days as gold prices are expected to take a breather with the trade war triggered by the US settles down.
Consumers, who were sitting on the sidelines due to high prices, are taking the plunge to buy whenever gold prices fall. Moreover, consumers are exchanging old gold jewellery for new to moderate the impact of price rally.
Kavita Chacko, Research Head, India, World Gold Council, said there has been a noticeable shift in consumer behaviour in response to soaring prices, with more buyers opting to trade in old jewellery for new and anecdotal reports suggest that 40–45 per cent of purchases now involve some form of exchange.
Strong performance
Despite record high prices, she said gold imports rebounded sharply in March to 47-52 tonnes after two consecutive months of decline and this has underscored continued interest in gold even at elevated prices.
Gold prices fixed by the London Bullion Market Association (LBMA) climbed by 24 per cent this year to $3,230 an ounce, with over 14 per cent of this increase occurring since March. The Indian domestic spot gold prices have mirrored this trend, rising 23 per cent y-t-d to ₹93,217 per 10g.
Initial earnings reports from leading jewellery retailers Kalyan Jewellers India, Titian Company and Senco Gold for March quarter point to a strong performance, with average revenue growth up 25–35 per cent y-o-y. This was largely fuelled by wedding related demand and festive buying.
Share in RBI reserves
Not just the consumers, but the RBI has also added a modest 0.6 tonnes of gold to its reserves in March, resuming purchases after a pause in February, according to WGC estimates. This brings the RBI’s total gold holdings to 880 tonne or 12 per cent of its total foreign exchange reserves – the highest level both in quantum and value terms.
Over the past year, gold’s share in the RBI’s forex reserves has risen nearly 4 per cent, reflecting a net addition of 57 per cent to its holdings.
Navneet Damani, Group Senior Vice-President, Head – Commodity, Motilal Oswal Financial Services, said as central banks bolster their reserves and investors seek safety, gold will remain a favoured asset.
“Barring any significant resolution in global trade tensions, we maintain a ‘buy on dips’ view from a medium to long-term perspective,” he said.
Satish Dondapati, Fund Manager, Kotak Mahindra AMC said gold prices this year have experienced significant movements due to ongoing trade tensions, rate cuts expectations, geopolitical uncertainties and weakening dollar.
Going forward gold will remain bullish, supported by strong central bank purchases and geopolitical uncertainties, he said.
Published on April 18, 2025
