Commerzbank strategists highlight concerns from India’s jewellery industry about a potential further setback in Indian Gold jewellery demand, which is important for the physical Gold market. They note that Prime Minister Modi has urged Indians to avoid Gold purchases for at least a year to protect foreign exchange reserves. Strategists also flag the risk of higher import duties if this appeal fails.
Indian jewellery demand faces fresh risks
“Despite the recovery in oil prices, gold has almost managed to hold on to the gains made in recent days.”
“Meanwhile, India’s jewellery industry fears a further setback in Indian jewellery demand, which is crucial for the physical gold market: Over the weekend, Prime Minister Modi called on Indians to refrain from gold purchases for at least a year in order to preserve the country’s foreign exchange reserves.”
“Although India purchased significantly less gold jewellery by tons – in the first quarter, this was almost 20% below the previous year’s level – gold purchases by value were the highest ever recorded in a first quarter due to high prices.”
“It remains to be seen whether the appeal will have any effect. If not, the government could raise import duties again.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/gold-indian-demand-risks-under-modi-call-commerzbank-202605121146
