Gold remains in the news cycle due to the latest rally in its prices. On Monday, international gold prices reached yet another high, surpassing USD 3,400 per ounce.
India's domestic jewellery market is projected to grow at a strong compound annual growth rate (CAGR) of 16 per cent between FY24 and FY28, reaching a market size of USD 145 billion by FY28, according to a report by Minerva Capital Research.
The uncertainties around Trump's reciprocal tariffs plan and its subsequent announcement this week have come as a jab in the arm for international gold prices, which have been moving northwards for a considerable period.
US President Donald Trump's 27 pc tariff on gems and jewellery industry will cause a disruption in the industry as US is one of the major exporting destinations for India, says Industry experts.
Gold prices could potentially reach USD 3,500 per ounce in the next 18 months if non-commercial purchases increase by 10 per cent, according to a report by BofA Global Research.
John Reade, Senior Market Strategist at the World Gold Council, gold has consistently performed well in risk-off environments, climbing from USD 1,000 during the financial crisis to USD 2,000 amid the pandemic, and now surpassing USD 3,000 as global uncertainty intensifies.
The record-breaking surge in gold prices has dimmed the appeal of the retail jewellery demand. The drop in gold imports in January also indicates the pullback in demand.
This surge was driven primarily by strong central bank purchases and increased investment demand. The combination of record-breaking gold prices and high volumes resulted in an all-time high total value of demand, reaching USD 382 billion.
Gold demand in the electronics sector peaked in 2010 at 328 tons but gradually declined to 249 tons by 2023. Recent quarters, however, have shown a modest recovery, driven in part by the expansion of AI-enabled devices.
International gold prices recovered modestly on Monday, snapping a six-day losing streak, but they are still around 9 per cent lower from their recent peaks. Domestic gold prices too followed suit.
Factors like de-dollarisation and geopolitical conflicts, including the ongoing Russia-Ukraine war and escalating Middle Eastern tensions, continue to drive demand for gold as a stabilising asset, said Sachin Jain, Regional CEO India of the World Gold Council on Wednesday.
Investment demand for gold skyrocketed, more than doubling from the previous year to 364 tonnes. This surge was primarily fueled by a shift in demand for gold exchange-traded funds (ETFs) among Western investors, with global gold ETFs adding 95 tonnes--a notable rebound as this marked the fi