India's gold market is showing clear signs of recovery that could strengthen further during the upcoming festive season, according to the World Gold Council's latest India Gold Market Update. The recovery is being driven by improving jewellery demand, steady investment interest and a rebound in imports, indicating firmer market conditions ahead. While elevated prices could continue to influence jewellery purchases, investment demand is expected to remain supportive throughout this period. Jewellery demand strengthened as consumers viewed recent price movements as an opportunity to buy, while deferred purchases returned to the market. Manufacturers also reported higher order flows, with jewellers increasing inventory ahead of the festive season. As per the World Gold Council, month-end LBMA Gold Price PM and MCX spot gold price changes and movement indicate that domestic gold prices remain below import parity, indicating local supply availability*. Market feedback suggests that the exchange of old gold for new jewellery has increased market supply and kept prices at a discount to the landed cost, with discounts narrowing meaningfully from around US$100/oz in mid-May and early June, to about US$45/oz in mid-August, though they remained above July's average of US$34/oz.
Gold prices have regained ground after a sharp correction in June and a period of stability in July, with the latest rally showing particularly striking momentum. 24K gold jumped ₹152 per gram to ₹16,309, while 22K gold rose ₹140 to ₹14,950 and 18K gold advanced ₹114 to ₹12,232 per gram. The sharp rebound comes after gold's July correction and has once again pushed the precious metal into the spotlight. 24K gold has surged ₹81,200 per 100 grams in just four days, adding to the excitement among investors and buyers. The recovery is supported by a weaker US dollar, expectations of a softer Federal Reserve stance, continued central bank buying and renewed safe-haven demand. The improvement in prices has coincided with a recovery in physical demand, with consumers viewing recent price movements as an opportunity to buy. As per the World Gold Council, gold prices stabilised during July before recovering in early August, reaching their highest levels in over two months. Recent market analysis shows that gold tagged $4,435 last week and failed, then tagged $4,436.15 Tuesday and failed again, establishing $4,435 to $4,450 as the operative ceiling until it breaks on a closing basis. The precious complex is running as a single trade, with gold up 10.52% over the past month and 33.53% year-over-year.
Gold rates in India climbed sharply on August 22, extending their surge for the fourth consecutive day, with current retail prices showing significant increases across major cities. At Delhi, 24-carat gold is available at ₹16,324 per 1 gram, 22-carat at ₹14,965 per 1 gram, and 18-carat at ₹12,247 per 1 gram. Mumbai maintains 24K gold at ₹16,309 per gram, 22K at ₹14,950 per gram, and 18K at ₹12,232 per gram. Kolkata, Chennai, Hyderabad, Lucknow, Patna, Bangalore, Bhopal, Pune, Thiruvananthapuram, Amritsar, Chandigarh, and other major cities also report similar pricing across 22-carat and 18-carat variants, with Ahmedabad showing slightly higher rates at ₹16,314 for 24K and ₹14,955 for 22K. Chennai stands out with 18K gold priced at ₹12,730 per gram, indicating regional price variations. At Tanishq, 22-carat gold is available at ₹14,995 per 1 gram, 24-carat gold at ₹16,358 per 1 gram, and 18-carat gold at ₹12,269 per 1 gram. According to Goodreturns, 22-carat gold prices soared by ₹140 in 1 gram, higher by ₹1,120 in 8 grams, surged by ₹1,400 in 10 grams and climbed by a whopping ₹14,000 in 100 grams.
Investment demand remained supportive despite moderating from the elevated levels seen earlier in the year. Indian gold ETFs recorded net inflows of ₹1,560 crore (US$163 million) in July, although this was 55 per cent lower month-on-month as per data from the Association of Mutual Funds of India (AMFI). ETF holdings increased by 1 tonne to 120 tonnes, while assets under management rose 2 per cent to ₹1,73,300 crore (US$18.1 billion). In the first two weeks of August, ETFs attracted an estimated additional ₹1,179 crore (US$124 million) of net inflows, indicating continued investor interest despite price volatility. Investor participation also grew, with a further 57,000 new folios (accounts) added during July, taking the total number of accounts to 12.53 million. Physical investment demand, while moderating from earlier highs, remained supportive during the period of price correction, with lower prices continuing to attract investors seeking strategic exposure to gold. The official number understates the reality, as Chinese gold imports reached approximately 163 tonnes in May while reported PBoC purchases for the same month were 9.95 tonnes, with the difference flowing into commercial bank vaults and Shanghai Gold Exchange settlement. Investors are pouring money into gold ETFs, resulting in spike of demand, as ETFs offer diversification and liquidity through real-time trading, with gold ETFs investing in physical gold or related assets.
Trading activity in gold futures also improved in July, with average daily volumes on the Multi Commodity Exchange of India rising to 14.9 tonnes, from 13.5 tonnes during the previous three months. Average daily turnover increased 9 per cent month-on-month to ₹21,400 crore (US$2.2 billion). Gold imports provided another indication of improving demand, with import value more than doubling in July to $4.16 billion, from $1.97 billion in June. Estimated import volumes increased to 40-45 tonnes from around 20 tonnes, reflecting stronger physical demand and inventory replenishment by manufacturers and retailers ahead of the festive season. Despite the improvement, activity remained below earlier elevated levels: average daily trading volumes were 59 per cent lower than January's peak and 8 per cent below July 2025 levels. However, turnover was 35 per cent higher year-on-year, reflecting the impact of higher gold prices on traded value. Chinese demand patterns show five consecutive months above 140 tonnes establishes this as a standing bid rather than opportunistic accumulation, with March imports reaching 143 tonnes, April delivering 157 tonnes, May at 151 tonnes, and June hitting 152 tonnes.
