India’s Q2 Gold Demand Falls 6% to 131.4 Tonnes

Despite the overall decline, investment demand showed greater resilience relative to jewellery purchases, the report indicated.

On the domestic commodity markets, gold and silver prices on the Multi Commodity Exchange eased by up to 1 per cent on Thursday amid profit-booking ahead of the US Federal Reserve’s policy decision.

Analysts described the market as balancing two competing forces: a relatively hawkish monetary-policy stance and elevated geopolitical risk in the Middle East. Gold has remained steady near the $4,080 mark. While the Federal Reserve kept rates unchanged and tempered expectations of an immediate September hike, the underlying safe-haven appeal of the metal is expected to reassert itself if uncertainties persist.

At the same time, the Fed’s continued commitment to a strict 2 per cent inflation target is seen as creating a challenging short-term macroeconomic environment for bullion.

Market observers noted that the performance of gold—and by extension jewellery sales—over the coming months will depend on several domestic and global factors. These include the Reserve Bank of India’s monetary-policy decision next week, subsequent Federal Reserve meetings from September onwards, the onset of the festive season in India and the year-end holiday period in Western markets.

The combination of softer jewellery demand, resilient investment interest and ongoing macroeconomic cross-currents leaves the near-term outlook for gold consumption in India finely balanced.