What India's July Gold Data Says About Global Bullion Demand

Key Takeaways

• Indian jewellery demand strengthened in July as buyers took advantage of steadier prices, with festive-season restocking now underway.
• Gold ETF inflows slowed sharply from June, but total assets under management kept growing.
• Futures trading on India's Multi Commodity Exchange and gold imports both rebounded after a quiet second quarter.
• India is one of the world's two largest gold markets, so shifts in its demand feed into global bullion supply and pricing.

India's gold market picked up across the board in July, according to the World Gold Council's monthly update. Jewellery buyers returned, futures trading rebounded and imports more than doubled in value, all pointing to firmer physical demand as the country heads into its festive and wedding season.

The update, from Kavita Chacko, the World Gold Council's Research Head for India, covers July data alongside early-August price moves. It's a useful read for anyone tracking global gold demand, because India remains one of the two largest consumer markets for the metal alongside China.

Prices stabilised, then jumped in early August

International gold, measured by the LBMA Gold PM price, rose 9% in the first two weeks of August to US$4,391/oz. Domestic Indian prices gained nearly 7% over the same period to INR151,744 per 10 grams.

Chacko noted that "the appreciation of the INR against the US dollar partially offset the rise in the international price, limiting gains in domestic prices." Local prices stayed below import parity throughout, a sign of ample local supply rather than scarcity.

Discounts to the landed cost of gold, driven largely by the exchange of old jewellery for new, narrowed from around US$100/oz in mid-May and early June to about US$45/oz in mid-August. That's still wider than July's average discount of US$34/oz.

Jewellery demand recovered beyond wedding purchases

Jewellery buyers who had held off during the price run-up earlier in the year came back in July. Chacko reported that "deferred purchases returned to the market, resulting in higher footfall and a recovery in demand beyond essential wedding-related purchases."

Manufacturers are seeing the flow-through. Order volumes have picked up, and jewellers have begun replenishing inventory ahead of the festive season, which the World Gold Council reads as a sign of growing confidence in seasonal demand.

ETF inflows slowed, but the investor base kept growing

Indian gold ETFs took in less money in July than June, but the underlying trend stayed positive. According to Association of Mutual Funds of India data cited in the update:

• Net inflows totalled INR15.6 billion (US$163 million), down 55% month-on-month
• Holdings rose by 1 tonne to 120 tonnes
• Total assets under management increased 2% month-on-month to INR1,733 billion (US$18.1 billion)
• 57,000 new investor accounts (folios) were added, taking the total to 12.53 million

Early August data suggests the pullback was brief. Inflows in the first two weeks of the month were estimated at INR11.79 billion (US$124 million), roughly three-quarters of all of July's inflows in half the time.

Futures trading rebounded after a soft quarter

Gold futures activity on the Multi Commodity Exchange of India (MCX) picked up in July after a sluggish second quarter. Average daily trading volumes rose to 14.9 tonnes, up from a 13.5-tonne average over the previous three months, while average daily turnover increased 9% month-on-month to INR214 billion (US$2.2 billion).

Volumes remain well down from the market's peak: 59% below January's high and 8% below July 2025 levels. Turnover told a different story, running 35% higher year-on-year, which the World Gold Council attributes to the impact of higher gold prices on the value of each contract traded.

Imports more than doubled in value

Gold imports rebounded sharply after two consecutive months of weakness. Import value rose to US$4.16 billion in July, more than double June's US$1.97 billion, with volumes estimated to have increased to 40-45 tonnes, up from 20 tonnes in June.

Recycled gold, mostly from old jewellery exchanged for new, continues to supplement supply. But the World Gold Council reads the import rebound as a sign of genuinely stronger physical demand rather than just restocking through recycling. Even so, gold's share of India's total merchandise imports stayed modest at 5%, well below the 11% average recorded in the January-March quarter.

What it means for investors

India's July data is a reminder that gold demand is a global picture, not just a Western investment story. When Indian jewellery buyers, ETF investors and futures traders move in the same direction at once, as they did last month, it adds a source of demand that sits alongside Western ETF flows and central bank buying in shaping bullion markets.

For Australian investors, the relevant point isn't the specific INR or MCX figures. It's that one of the world's largest physical gold markets has moved from caution to renewed buying interest, heading into its strongest seasonal demand window of the year. Broad-based demand from major consumer markets is one of the underlying factors Ainslie Bullion watches when assessing the physical gold market, alongside Western investment flows and central bank activity.

The World Gold Council expects demand conditions to keep improving into the festive season, though Chacko was careful to frame this as a seasonal expectation rather than a price call: "while elevated prices may continue to influence jewellery purchases, investment demand remains supportive."

This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.