India sees consumer sentiment for gold improve but shoppers are still waiting for lower prices

By

Isabelle Crossley

Published
Apr 25, 2022

Gold prices in India are steadying after months of price increases and demand is returning due to weddings and gold’s place as a secure investment. However, continued high prices have kept some shoppers cautious.

The current spring/ summer wedding season has boosted demand for gold jewellery somewhat, especially as there are few restrictions on gatherings this year following lockdown restrictions in previous years. However, high gold prices have curbed bridal gold purchases to the extent that demand is not increasing at the rate usually expected during this wedding season, ET Bureau reported. 
 
“Demand has improved slightly but still many retail consumers are waiting for a bigger drop in prices,” Hyderabad-based bullion merchant CapsGold’s managing director Chanda Venkatesh told Reuters about current consumer sentiment. 

Gold dealers offered discounts of $10 per ounce over domestic prices last week, which is inclusive of both the 10.75% import levy and 3% sales levy. Although last week saw a drop from the 19-month peak price of Rs 55,558 per 10 grams the week before, it was still trading high at Rs 52,200 per 10 grams on April 22. 
 
As the war in Ukraine continues, gold’s current popularity as a ‘safe haven’ investment is expected to continue. Inflation in India and many countries internationally is also expected to continue to boost gold purchasing.