Gold demand across Asia has always played a pivotal role in shaping the global price of this precious metal, with countries like China and India frequently driving significant market shifts.
While global gold prices continue to trend upward, the buying and selling behavior in Asia—particularly in China and India—has had a considerable impact on price movements. Reports indicate that the domestic gold market in India has heated up this week, with gold trading at a premium for the first time in five months.
One of the main reasons behind this surge in demand is the Akshaya Tritiya festival, a major cultural and religious occasion in India during which purchasing gold is a tradition. As a result, the Indian gold market has shifted from offering steep discounts in previous weeks to now trading at a premium.
By Friday, the premium had risen to $3 per ounce, a stark contrast to the $80 discounts seen just a week prior. In 2024, India’s total gold demand has surpassed 800 tonnes, making it the world’s largest consumer of gold jewelry and the second-largest investor in gold bars and coins.
Asia’s crucial role in global gold price fluctuations
On the other hand, China—traditionally the world’s largest gold consumer—experienced a slowdown during its Labor Day holiday. Analysts expect market volatility to continue depending on how Chinese investors re-engage after the break. Additionally, demand for gold jewelry in China has dropped significantly, hitting a five-year low amid record-high prices and a shift in consumer preference toward lighter, more affordable items. This shift has helped India climb to the top of the global jewelry demand rankings.
Conclusion
The global gold market remains highly sensitive to unpredictable factors such as national festivals and cultural trends in densely populated countries like China and India. The future of gold prices will largely depend on whether strong demand from Asia—particularly from China—returns in the coming weeks.
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