(Kitco News) - Wedding season is over in India and it has had an effect on the demand for gold over the last month or so. The World Gold Council noted that retail demand remained muted as the wedding season ended and sowing activity picked up with the onset of the monsoon.
As the demand has been slightly thin the local market traded in a discount to the spot price at around $5/oz. Due to this, official imports of the yellow metal declined to 44.3t in June, 55% lower m/m.
Investment demand was slightly better as ETFs witnessed a small net inflow of 0.2t in June, primarily driven by higher inflation and a depreciating rupee. This moved total holdings to 39.1t.
On the positive side, the Reserve Bank of India (RBI) added 3.7t of gold in June, increasing its total gold reserves to a respectable 768.8t. It was around 760t at the end of Q1. They are now roughly 9th in the world central bank rankings based on recently available data.
Looking ahead, official imports are expected to remain subdued during the rest of July due to the muted demand environment. Economically conditions are not great with rising interest rates around the world. Also, the weather will be a big factor in local domestic demand.
