Premium Prices, Higher Imports: Inside India’s Unstoppable Festive Precious Metal Demand

As India gears up for the festive season, gold and silver imports have surged sharply despite soaring prices. Banks and jewellers rushed to stockpile precious metals in September, nearly doubling imports from August. This strong buying momentum is driven by the auspicious festival demand and an imminent rise in import taxes.

 

Key Highlights On Import Surge

Market Impact And Economic Considerations

This surge in imports is set to maintain upward pressure on gold prices, which reached record levels amid subdued demand from China, the world’s largest consumer. However, the heavy import volumes may widen India’s trade deficit and contribute to further depreciation of the rupee. Jewelers have increasingly accepted paying premiums to meet sharp festive demand, reversing earlier cautious buying.

 

Looking Forward: Festival Season Demand And Price Dynamics

With Diwali approaching, the festive fervour is expected to sustain demand for gold and silver products, supporting elevated price levels. Market watchers will closely monitor whether rising import costs and global price volatility temper buying appetite in the coming weeks. Nonetheless, Indians continue to regard gold as a vital investment and auspicious purchase during this period.

 

Source: Reuters, Economic Times, Moneycontrol, Financial Express, Kitco, News18