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India's gold imports surged to USD 22.70 billion in April-August 2024, driven by strong demand from central banks, jewellers, and reduced import duties. The festive season and wedding demand have further boosted the market, despite a 30 percent rise in gold prices compared to the second half of 2023. In contrast, jewellery exports fell to USD 11.10 billion, down from USD 12.43 billion in 2023, reflecting weakened international demand. The Nuvama report predicts an 18 percent increase in domestic jewellery demand for the second half of 2024, fueled by rising interest in lower-priced items. The World Gold Council forecasts India's gold demand to reach 850 tonnes in 2024, a 12 percent year-on-year growth.

Key Highlights

# India's gold imports rose to USD 22.70 billion in April-August 2024.

# Jewellery exports dropped to USD 11.10 billion during the same period.

# Strong demand during the festive season boosts the domestic gold market.

# Central banks' purchases drive gold prices and volume growth.

# Jewellery demand is projected to rise by 18 percent in the second half of 2024.

India's gold imports reached USD 22.70 billion between April and August 2024, up from USD 18.14 billion in the corresponding period last year. This surge is primarily driven by increasing demand from central banks and jewellers, as well as the reduction in import duties outlined in the union budget. The festive and wedding seasons are fueling gold purchases, pushing demand to new heights. Despite gold prices soaring by 30 percent compared to the second half of 2023, demand remains resilient, particularly in urban and semi-urban areas.

Jewellery exports, however, fell to USD 11.10 billion in the April-August 2024 period, a decline from USD 12.43 billion in the same timeframe last year. While domestic demand remains robust, export markets are experiencing a downturn, highlighting the shifting dynamics in the gold sector. According to Nuvama’s latest report, affluent buyers drove demand in early 2024, but there has been a notable increase in demand for affordable jewellery in semi-urban and rural markets during the second quarter.

Retailers are expanding their networks to cater to this growing demand, with a predicted 18 percent rise in jewellery volumes in the second half of the year. Central banks' continued buying, combined with a reduction in customs duties on gold imports, is expected to sustain price growth and drive India's gold demand to 850 tonnes by the end of 2024.

Finally

With rising gold prices and robust domestic demand, India's gold market is set for sustained growth, driven by central bank purchases and festive demand.

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