India’s gold imports have surged to their highest levels since early 2021, driven by robust seasonal demand, while silver coin sales from major mints have fallen short of 2023’s figures despite the metal’s strong price performance, according to precious metals analysts at Heraeus.
In their recent precious metals update, analysts reported that gold imports in India reached a three-and-a-half-year high in August, amounting to 125 tonnes. This represents a significant year-on-year increase of 58% and a staggering 212% month-on-month rise, attributed to strong consumer demand and industry restocking ahead of the Diwali festival and other seasonal events in the fourth quarter. The increase in imports was further facilitated by the reduction of import tariffs on precious metals in July.
“Consumers who had been postponing jewelry and bullion purchases due to rising gold prices in the first half of 2024 likely seized the opportunity presented by the tariff reductions,” the analysts stated. They noted that during August, the local gold price in India averaged a discount of $8.2 per ounce. Following a significant shift from discount to premium in late July, the market appears to have stabilized, with demand remaining steady above pre-tariff reduction levels. The analysts anticipate that any correction in gold prices will prompt retailers to restock, thereby maintaining elevated import volumes.
India continues to hold its position as the world’s second-largest gold consumer, with the subcontinent accounting for 761 tonnes of gold demand in 2023. Analysts project that demand could rise by approximately 10% this year, surpassing 800 tonnes for the first time since 2015. Despite recent escalations in tensions in the Middle East, gold prices remained relatively stable, consolidating around $2,650 per ounce.
Gold prices have experienced volatility this week, dipping to a low of $2,640 per ounce around 2 a.m. EDT before reaching a triple-top high just below $2,660 shortly after 8 a.m. The price then fell to a session low of $2,637.77 per ounce an hour later. Spot gold last traded at $2,641.88 per ounce, reflecting a loss of 0.45% during the session.
Turning to the silver market, Heraeus noted that while the Perth Mint reported a sharp increase in silver sales last month compared to August, overall coin demand is significantly below last year’s levels. Coin and bar sales at the Perth Mint improved by 49% month-on-month, totaling 963,000 ounces in September, driven by new product releases and a strong performance of silver prices. The silver price in Australian dollars rose by 7.46%, outperforming the 5.27% increase in U.S. dollars, contributing to positive domestic sentiment. However, it is important to note that a substantial portion of the Perth Mint’s sales comes from international buyers.
Year-to-date sales at the Perth Mint are down more than 40% compared to the previous year, following a downward trend that bottomed out in June. Similarly, silver coin sales from the Canadian Mint have plummeted 52% year-to-date, according to the latest data.
Despite silver reaching another cycle high on Friday, it again failed to break the $33 per ounce mark. After four consecutive days of gains, silver closed 2.55% higher at $32.48 per ounce. Analysts suggest that if silver can close above the resistance level of $32.94 per ounce, it could experience rapid upward movement.
On Monday morning, silver also faced price fluctuations, with spot prices dropping from $32 per ounce at 7:45 a.m. EDT to a session low of $31.412 by 9 a.m. As of the latest update, spot silver was trading at $31.865 per ounce, down 1.05% on the day.
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