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India’s gold jewellery demand is poised for an uptick this festive season, buoyed by cultural buying trends and recent Goods and Services Tax (GST) reforms, despite historically high gold prices, according to a recent report by Mirae Asset Mutual Fund.
The report highlights that India and China continue to dominate global gold jewellery consumption, together accounting for over 50% of worldwide demand. In India, traditional festive and wedding-season buying is expected to support resilience in gold purchases, while in China, a revival in consumer spending and government-led stimulus could drive urban demand.
However, the surge in gold prices may temper overall recovery. Gold has climbed past USD 3,700 per ounce—after ending August at USD 3,429, up 3.9% for the month and over 31% year-to-date, according to data from the World Gold Council. Mirae Asset noted that while prices are likely to rise further, the momentum may face resistance due to price sensitivity.
“Gold continues to benefit from global macro uncertainty, ETF inflows, and a weakening US dollar,” the report said. “We are cautiously optimistic, but elevated price levels could limit near-term growth.”
On the domestic front, gold on India’s Multi Commodity Exchange (MCX) is trading around ₹1,09,000 per 10 grams, reflecting a sharp rally in 2025. India’s gold market has outperformed several peers this year, driven by strong investment flows and a steady consumer base despite soaring prices.
The report also underscored the potential impact of recent GST reforms, which could make gold jewellery more affordable or attractive, especially during the high-demand festive period. While specific details on GST adjustments were not mentioned, analysts expect that any rate rationalisation or compliance simplification could spur buying sentiment.
In parallel, silver has continued its strong performance, supported by robust industrial demand. After breaching the USD 30 per ounce level in 2024, silver has remained elevated, driven by its use in electronics, semiconductor manufacturing, 5G infrastructure, and artificial intelligence (AI) data centers.
“Industrial demand accounts for nearly 60% of silver usage,” the report noted. “Emerging technologies, including silver-ion batteries and energy storage systems, are reinforcing silver’s long-term demand outlook.”
With both gold and silver gaining traction as investment and industrial assets, Mirae Asset expects the upcoming festive quarter to be a pivotal period for India’s precious metals market.
Source: ANI
