Indian consumers are actively purchasing gold for the Dhanteras and Diwali festivals, undeterred by record-high prices. Key highlights include:
Strong Demand: Despite local gold prices reaching 78,919 rupees per 10 grams—over 31% higher than last year’s Diwali—demand remains robust. This is attributed to gold’s perceived better returns compared to the cooling stock market.
Cultural Significance: Dhanteras, celebrated as an auspicious day for gold purchases, saw significant buying activity, with expectations that turnover in value will surpass last year’s figures due to higher prices.
Market Impact: Increased gold imports could widen India’s trade deficit and exert pressure on the rupee. Indian dealers have reported premiums of up to $1 an ounce over official domestic prices, a shift from previous discounts.
Silver Demand: Alongside gold, there is strong demand for silver, which has recently outperformed gold in returns. Local silver futures also reached record highs, indicating a growing interest in silver coins and bars.
Investor Behavior: Investors are diversifying their portfolios by allocating more to precious metals, reflecting a strategic shift towards gold and silver amid market uncertainties.