India's Gold Demand Slows While China Boosts Purchases Amid Price Surge

Regional Demand Dynamics

The recent surge in gold prices has led to a significant slowdown in physical gold demand in India, with premiums dropping to US$ 6 per ounce above domestic prices. In contrast, China has seen a surge in gold demand as retailers increased their purchases following the holiday season.

Indian Market Conditions

In India, gold prices are being traded around 138,000 rupees per 10 grams, just below the record high of 140,465 rupees. The high prices have dampened jewelry demand significantly, with retail buyers postponing their purchases. Ashok Jain, owner of Chenaji Narsinghji, a wholesale gold trader in Mumbai, noted that "jewelry purchases have been severely impacted by the price increase. Retail buyers are delaying their purchases."

Chinese Market Contrast

The situation in China presents a stark contrast, where retail interest in gold has picked up post-holiday season. Traders in China have been charging premiums above international prices due to the renewed demand. This divergence in demand between India and China highlights the different market dynamics at play in Asia's two largest gold-consuming nations.