India Gold Demand Falls as Prices Rebound, While Chinese Buying Improves

Gold demand across Asia showed contrasting trends this week, with consumer buying in India slowing after a rebound in domestic prices, while demand in China improved as local bullion prices became more attractive to buyers.

India, the world’s second-largest gold consumer, witnessed a decline in jewellery purchases after domestic gold prices recovered from a three-month low reached earlier in the week. Gold prices climbed to around ₹148,046 per 10 grams on Friday, reversing part of June’s 8.4% decline, the first monthly fall since March. The rapid rebound prompted many retail buyers to delay purchases, hoping for another price correction.

Bullion dealers across major Indian markets reported mixed trading conditions. While some retailers continued offering discounts to stimulate sales, volatile price movements left jewellers cautious about building fresh inventory. Traders noted that the current period is traditionally a slow season for gold demand in India, with no major festivals or wedding-related buying expected in the immediate future.

In contrast, China’s physical gold market showed signs of recovery. Premiums on bullion improved as local prices aligned more closely with international benchmarks, encouraging renewed buying interest after weaker demand in previous weeks. Market participants said the psychologically important $4,000-per-ounce level had attracted bargain hunters, helping support physical purchases.

Elsewhere in Asia, trading conditions remained relatively stable. Gold in Hong Kong traded at slight premiums, while Japan continued to record modest discounts. Singapore’s market fluctuated between small discounts and premiums, reflecting balanced regional demand.

Globally, gold prices headed for their first weekly gain in five weeks after weaker-than-expected U.S. employment data reduced expectations of an imminent interest-rate hike by the U.S. Federal Reserve. Softer monetary policy expectations generally benefit gold by lowering the opportunity cost of holding the non-yielding asset, supporting investor demand worldwide.

Market analysts say the contrasting performance between India and China underscores how sensitive Asia’s two largest gold markets remain to short-term price swings. While Indian consumers tend to postpone purchases during price rebounds, Chinese buyers have recently taken advantage of more favourable pricing, offering support to regional physical demand.