In India, the domestic gold market is exciting again. According to Reuters, for the first time in 5 months, gold has been traded at a higher price than the official price. At the beginning of the week, agents also sold gold with a discount of up to 24 USD/ounce, but by the weekend, they calculated an additional 3 USD/ounce. Last week, the discount of up to 80 USD.
The Akshaya Tritiya holiday season has boosted retail demand, and demand has increased sharply as gold prices have adjusted down, said a player in Mumbai. Akshaya Tritiya is the second largest gold buying festival in India after Dhanteras and will be held this Wednesday.
A strong price adjustment from a record high of $3,500/ounce last week has triggered demand again in the subcontinent. Many consumers have been waiting for prices to fall due to too strong fluctuations, now they may buy if prices are more stable, said another dealer in Chennai.
Meanwhile, China - the world's largest gold consumer - is temporarily suspending trading due to the Labor International holiday from May 1 to 5. This has caused regular buying from China to temporarily disappear from the global gold market.
Ole Hansen - Head of Commodity Strategy at Saxo Bank - commented: "Buying power from China has temporarily disappeared, putting gold under further downward pressure".
He said the big question now is whether Chinese investors will return strongly after the holiday. If buying pressure weakens, there could be further sell-offs, and prices could be adjusted further to the $2,950 tri000/ounce zone a zone of great psychological and technical significance.
Joseph Cavatoni - senior strategist at the World Gold Council also said that cash flow into gold ETFs in China in April reached a record high, far exceeding the US.
Before the holiday, Chinese buyers were very active, with prices differenceing 34 to 48 USD/ounce higher than international prices, compared to 44-50 USD/ounce in the previous week.
Although China is still the largest gold consumer, according to a report from Zerodha Fund House, India has surpassed China in gold jewelry consumption in 2024, with a total of 563 tons.
India also bought 239 tonnes of bullion and gold bars in 2024, up 60% from 2023, ranking second globally in this investment.
In addition, gold ETFs in India have also increased sharply, from 21 tons to 63 tons in the past 5 years.
In contrast, China saw a sharp decline in demand for gold jewelry. According to the World Gold Council, only 125 tons were consumed in the first quarter of 2024, the lowest level in 5 years and down 19% compared to the 10-year average.
The reason is said to be that prices are too high and tastes are changing. Wang Lixin - Regional Director of the World Gold Council in China - said that Chinese consumers tend to switch to lighter products with more reasonable prices.
Liu Yan - Vice President of Yuyuan Jewelry Group also said that many people postpone gold purchases or choose lighter products.
Deng Ronghua - General Director of Chow Tai King Jewelry - said: "Previously, people preferred heavy jewelry, now light jewelry is more popular, with an average spending of 2,000 to 3,000 yuan. In addition, the gold recycling sector is also developing well.
