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Asia saw a strong inflow of USD 438 million in gold during July, marking the 17th consecutive month of positive growth, according to the World Gold Council. India played a significant role in this momentum, leading the region after the government reduced the gold import duty from 15% to 6% in the Union Budget. This policy change drove gold prices in India to Rs 65,314 per 10 grams, resulting in a 17.5% year-to-date return and bolstering inflows into Indian gold ETFs. Globally, gold prices rose by 4% in July, closing at USD 2,426 per ounce, supported by lower US Treasury yields and a weaker dollar. This price surge contributed to a record month for global gold ETFs, with net inflows of USD 3.7 billion, pushing total assets under management to USD 246 billion. Increased trading volumes further highlighted strong investor interest in gold as a safe-haven asset.

Key Highlights

* Asia attracted USD 438 million in gold inflows in July, marking 17 consecutive months of growth.

* India led the inflows, benefiting from a reduction in gold import duty from 15% to 6%.

* Gold prices in India reached Rs 65,314 per 10 grams, marking a 17.5% y-t-d return.

* Global gold ETFs saw net inflows of USD 3.7 billion, with a total AUM reaching USD 246 billion.

Asia continued its strong performance in the gold market, attracting USD 438 million in inflows during July, according to the World Gold Council. This marks the 17th consecutive month of positive inflows for the region, with India emerging as the leader, following a significant reduction in gold import duty. The Indian government reduced the import duty from 15% to 6% in the Union Budget, a move that has bolstered gold investments across the country.

The impact of this policy change was evident in July, as gold prices in India surged to Rs 65,314 per 10 grams, delivering a 4.5% return for the month and a robust 17.5% return year-to-date. This strong price performance has driven significant inflows into Indian gold ETFs, as investors capitalized on the favorable market conditions. The attractive pricing and enhanced investment landscape have made gold an increasingly preferred asset class among Indian investors.

On the global front, gold prices experienced a resurgence in July, closing the month 4% higher at USD 2,426 per ounce. The price increase was primarily driven by lower 10-year US Treasury yields and a weaker dollar, which enhanced gold's appeal as a safe-haven asset. The surge in prices also led to a record month for global gold ETFs, with net inflows of USD 3.7 billion, pushing the total assets under management to a new peak of USD 246 billion.

Gold trading volumes also surged, with average daily volumes reaching USD 250 billion, reflecting heightened activity in the London Bullion Market Association (LBMA) and major exchanges like COMEX. This increase in trading volume further underscores the strong investor interest in gold as a reliable investment during uncertain times.

Conclusion

India's reduction in gold import duty, coupled with strong price performance, has positioned the country as a key driver in Asia's ongoing gold inflows.

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