India’s gold purchases in August hit nine-month high – WGC


IAC Photo by Parivartan Sharma

India’s gold imports hit a nine-month high in August at 58.5 tons, more than double of the same month a year ago, according to the World Gold Council.

However, year-to-date imports were down 63%, showing the impact of the pandemic on the world’s top consumer. Around 70% of the demand during August were during the first two weeks  following a rally

Indian gold prices hit an all-time high of Rs 57,000/10 grams in August, tracking international prices that breached above $2000/troy ounce to achieve a record.

Demand for gold started to improve from July- onwards, fuelling a further surge in imports in August in expectation that the strong demand would continue. But that has failed to materialise following a correction in prices.
Indian gold prices have come down to below Rs 50,000/10 grams currently, while international prices are quoting around 

Currently, gold demand in India remains muted despite a sharp pullback in prices, but it is expected to revive during the upcoming festival season on expectations of a bumper summer crop.

Expectations are that jewellers may take advantage of the skid in prices to start stocking up in the run up to the festival season that begins from October

“We are expecting good demand between October and January.  Right now there is a lull in buying, but a lot of people were coming when prices were higher,” said Ganesh Aggarwal, managing director of Shiv Sahay and Sons, a bullion dealer which has 13 branches across India.

He said people who were buying in previous weeks were mainly investors in bullion bars and coins, but there were hardly any jewellery buyers.

Buying pattern to reverse

The pattern of buying is likely to reverse in coming weeks towards more jewellery buyers.

India is expected to harvest a record 144.52 million tons of food grains production for the current summer season, helped by above average monsoon rainfall, according to the government. Around 70% of the gold demand comes from rural India.

Though traditionally India has been the largest consumer of  physical gold along with China, the nationwide lockdown following the Covid outbreak has hit jewellery purchases, though investment demand has picked up.

Hareshkumar Acharya, managing director at Parker Bullion, echoed that the investment demand had fallen as people were waiting for prices to stabilise before resuming purchases.

He expected gold prices to rise again from October due to safe haven buying due to political uncertainty in the US in the run up to presidential elections.

Krishna Kumar Nathani, managing director of, also said that the fall in gold prices is likely temporary as central banks have pledged to keep interest rates low to counter the effects of the pandemic.

Typically, Indian investors usually resume buying only when they see a price uptick, he added.

Meanwhile, the Reserve Bank of India added 4 tons of gold to its reserves, bringing year-to-date purchases to 33.2 tons and taking its total gold reserves to 668.2 tons.   

The RBI has stepped up its gold purchases with the aim of diversifying its foreign reserves and maintaining the safety and liquidity of its forex reserves.

Nathani said that expectations are that central bank purchases may pick up in coming months worldwide as gold is being seen as an alternate currency to the dollar, which is expected to weaken in value. 

Biman Mukherji is a columnist and consulting editor at He has worked for international news organisations such as Reuters, The Wall Street Journal as well as for newspapers like The Times of India. He can be reached at

Leave a Reply

Your email address will not be published. Required fields are marked *