Highlights
- Gold steady with gains in August; discounts narrow in India
- Retailers gear up for festive boost, ramping up inventories
- Positive inflows1 and one new fund entry drive continued gold ETF growth
- RBI holds steady on gold reserves in July
- July’s gold imports surge, bracing for festive demand.
Looking ahead
- As the festive and wedding season approaches there are signs that gold jewellery demand is gaining momentum, and with investment interest holding firm, overall gold demand could receive a boost.
Gold gains but remains range bound
Gold prices have gained renewed strength in August, with international gold prices rising over 1% in the first half of the month to reach US$3,335/oz, building on the modest 0.3% gain in July.2 A combination of factors, including a weaker US dollar, expectations of a Fed rate cut, rising inflation expectations, and ongoing tariff developments has driven the recent price movement. Similarly, gold price movement in July was supported by tariff tensions, geopolitical risks, and inflation concerns, with market momentum also contributing. However, overall price movement has remained range-bound. Despite short-term fluctuations, gold continues to outperform in 2025, delivering a 28% return in US dollar terms year-to-date.3
Chart 1: Gold prices rise; bound by range
End of month LBMA Price PM and domestic spot price changes and movement*
Source: Bloomberg, World Gold Council
Domestic gold prices in India have closely tracked international trends, with a weaker rupee amplifying gains. As of mid-August, prices had risen 1.6% month-to-date4 to INR 99,665/10g, taking the year-to-date increase to 31%. Importantly, signs of improving demand have led to a narrowing of domestic market discounts5 – from an average of US$27/oz in June to US$3.7/oz as of mid-August.
Gold jewellery market eyes festive season revival
Signs of demand revival are emerging as the gold jewellery market gears up for the upcoming festive and wedding season (from early August to year-end). Anecdotal reports from industry stakeholders suggest a positive outlook. This optimism was evident at the recent India International Jewellery Show (IIJS),6 the country’s largest jewellery trade fair. As per anecdotal reports from the event, many manufacturers reported stronger-than-expected buying interest and a noticeable pickup in orders from both large chain stores and independent retailers. Retailers who had been cautious about their inventories in recent months due to lacklustre demand reported active restocking in anticipation of improved festive sales. And gold price stability also reportedly supported buyer sentiment. Furthermore, to appeal to price-sensitive customers and to drive volumes, manufacturers are focusing on lighter- weight jewellery.
Meanwhile, market reports suggest that investment demand for physical gold, i.e. bars and coins, remains healthy.
Positive flows and expansion in gold ETFs
Flows into Indian gold ETFs remained positive in July, marking the third consecutive month of net inflows. Global policy-related uncertainties and geopolitical tensions have been major drivers of this trend. But, the pace of net inflows slowed, declining to INR12.6bn (US$146mn) in July, down 41% from the previous month. This was broadly in line with our initial estimate7 and nearly 34% higher than the 2024 monthly average of INR 9.4bn. The positive momentum has carried into August, with partial data for the first two weeks indicating higher inflows into Indian gold ETFs.
At the end of July Indian gold ETFs’ cumulative assets under management (AUM) stood at INR676bn (US$7.85bn), a 96% y/y increase. Total gold holdings rose to 68t, with 1.2t added during the month.8 Investor interest in gold ETFs continues to strengthen as indicated by the steady growth in new accounts (folios); 215k new folios were added in July, bringing the total to 7.86mn, a 42% y/y increase.9
One new gold ETF was also launched in July,10 bringing the total number of gold ETFs listed in India to 21.11
Chart 2: Healthy inflows and rising holdings
Monthly gold ETF fund flows in INRbn, and total holdings in tonnes*
Source: AMFI, ICRA Analytics, CMIE, World Gold Council
RBI’s gold reserves unchanged
The Reserve Bank of India did not add to its gold reserves in July, following a modest addition of 0.4t in June. Over the first seven months this year it increased its gold reserves by 4t, a sharp contrast to the 40t bought during the same period in 2024. We believe that this suggests a measured approach in the RBI’s gold reserve management amid significant gains in the gold prices. Despite the slowdown, RBI’s gold holdings remain at a record high of 880t, now accounting for 12% of its foreign exchange reserves, up 4% y/y.
Spurt in imports
Gold imports saw a significant rebound, following three months of declines. At US$4bn, imports in July notably surpassed the monthly average imports for the first six months of 2025 (US$3bn); up 14% y/y and more than double the value of those during June. Our estimates indicate that the volume of gold imported in July ranged from 42t to 48t. The higher import levels suggest that manufacturers are likely preparing for festive season demand, beginning in August.
Chart 3: Uptick in imports
Monthly gold imports in tonnes and US$bn*
Source: Ministry of Commerce and Industry, CMIE, World Gold Council
This article is republished with permission from the World Gold Council.