India emerges as key player in global gold market with significant purchases and growth 

India has become the third-largest gold buyer in May after Switzerland and China, according to the World Gold Council 

New Delhi: The global gold market experienced notable shifts in May, with India emerging as the third-largest gold buyer, following Switzerland and China, according to the World Gold Council (WGC). India’s purchase of USD 86.5 million worth of gold contributed significantly to the positive momentum in the market, which saw global gold ETF holdings rise to 3,088 tonnes and total assets under management (AUM) increase to USD 234 billion, reflecting a 2% increase for the month. 

This resurgence in gold ETF inflows marked the end of a twelve-month losing streak, driven by strong demand in Europe and Asia. Physically backed gold ETFs enjoyed a net inflow of USD 529 million in May, their first positive movement since May of the previous year. European gold ETFs recorded their first inflows in a year, narrowing year-to-date outflows to USD 6.3 billion, while Asia maintained its streak with the fifteenth consecutive month of inflows, totaling USD 398 million in May. China was a significant driver, accounting for USD 253 million of the inflows, spurred by rising local gold prices and a weakened currency. 

In this context, the Indian gold market has shown remarkable resilience and growth. Speaking at the opening ceremony of the 16th edition of the Hyderabad Jewellery Pearl & Gem Fair, a WGC representative highlighted a 6-7% increase in the Indian gold market in Q1 2024. This growth translates to a market value of approximately Rs 75,000 crores, up from Rs 65,000-66,000 crores in the same quarter last year. 

Jewellery consumption in India saw a 3-4% increase, while bars and coins experienced a significant 19% growth in volume, leading to a 32% increase in value. The Reserve Bank of India has also been a substantial buyer, purchasing 19 tonnes of gold in Q1 alone, following 16 tonnes in the previous year. 

Gold prices continued to climb, achieving a third consecutive monthly gain in May. The price hit an all-time high of USD 2,427 per ounce mid-month before retreating to USD 2,348 per ounce. Despite a more moderate gain compared to previous months, market activity remained strong, bolstered by net long positions and renewed interest in gold ETFs. 

Retail Jeweller India News