In the face of soaring gold prices, Indian households continue to show a remarkable appetite for the precious metal. While the price per kilogram surged by 33.78% during the 2024-25 period, import volumes dipped only slightly, revealing a resilient demand for gold among consumers. According to data from the Department of Commerce, this year saw a mere 4.79% decline in import demand, showcasing the enduring allure of gold in India.

Rising Gold Imports in Value

The financial year 2024-25 marked a significant increase in the value of gold imports, which rose by 27.38% year-on-year, totaling $58.01 billion. This represents an additional $12.47 billion compared to the previous year, highlighting the ongoing investment in gold despite the high prices.

• Volume of Imports: Gold imports in terms of weight fell to 757.15 tonnes, down from 795.32 tonnes in the previous year.
• Jewelry Exports: The decline in gold demand can be partially attributed to a reduction in gold jewelry exports during the financial year.

Global Influence on Gold Demand

As international gold prices soared to an average of approximately $76,611.73 per kilogram, the global jewelry sector witnessed an 11% contraction in demand, largely due to elevated prices pressuring consumers’ buying power. While this trend affected many nations, India’s decline of only 2% stands in stark contrast to China’s significant 24% drop, showcasing India’s relative resilience in the face of rising costs.

Seasonal Surges in Demand

India’s gold demand experienced notable spikes during specific months in 2024. August saw a surge in interest following the Modi government’s first full budget, which reduced import duties on gold from 15% to 6%. The festive season in November further contributed to increased purchases as consumers sought to buy gold for celebrations.

Market Dynamics and Future Trends

Since October 2022, gold prices have been on a steady rise, with a pronounced spike following the November 2024 elections in the United States, which saw Donald Trump return to the presidency. This political shift has led to increased volatility in global financial markets, prompting investors to flock to gold as a safer asset.

In summary, despite the challenges posed by high prices, the demand for gold in India remains robust, driven by cultural practices, seasonal festivities, and strategic financial decisions. As the global market continues to fluctuate, gold retains its status as a favored investment among Indian households.