By Brijesh Patel and Rajendra Jadhav
(Reuters) – A stellar rally that has lifted global gold prices to all-time highs has cast a shadow on jewellery purchases for India’s wedding season, while dealers in China offered discounts to lure buyers.
Benchmark gold prices hit a record $2,942.70 an ounce this week as fears of a global trade war, spurred by possible new U.S. tariffs, pushed investors towards the safe-haven asset. [GOL/]
“A lot of customers want to buy gold for the wedding season, but they’re holding off because prices keep going up. They keep calling us, asking when the prices will drop and when’s the right time to buy,” B Muthuvenkatram, a Coimbatore-based jeweller said.
Weddings are a major driver of gold purchases in India, with bullion in the form of jewellery forming a crucial part of a bride’s attire and a popular gift from family and guests.
“Right now, jewellery demand has taken a big hit — it’s down by 70-80%. Jewellers all over the country are seeing slow sales,” said Surendra Mehta, secretary at the India Bullion and Jewellers Association.
Domestic gold prices in India, the world’s second-largest gold consumer and a major importer, hit an all-time high of 86,360 Indian rupees ($993.81) per 10 grams on Tuesday. They have jumped more than 10% so far in 2025 after rising more than 21% in 2024.
The recent spike in prices dented demand and has prompted Indian dealers to offer a discount of $30 – $38 an ounce – inclusive of 6% import and 3% sales levies – in the last four weeks, over official domestic prices.
“Demand is negligible. Under normal circumstances, discounts could have exceeded $100 per ounce, but due to a supply crunch, they are only around $25 per ounce. Consumers need time to adjust to these record-high prices.”
In top consumer China, gold was offered at a discount of $7-$10 per ounce over spot prices last week as record prices hammered appetite. [GOL/AS]
“Before the Chinese New Year, we saw demand pick up but should be holiday (related). Demand is very weak now since the price is higher,” a China-based trader said.
India’s jewellery consumption stood at 563.4 metric tons in 2024, surpassing China’s 511.4 tons, according to data from the World Gold Council (WGC).
China and India together account for more than half of global consumer gold demand.
“The high level of gold prices has certainly dented physical demand in both China and India, especially on the jewelry side, but we are seeing good ETF buying as well as central bank buying that is offsetting this,” said Marex analyst Edward Meir.
“Now that Chinese New Year is behind us, we have seen a clear easing in demand and offtake for physical gold in China and Hong Kong has declined sharply,” independent analyst Ross Norman said.
“Reflecting the overall weaker physical demand, gold prices have slipped from a $20 premium over Chinese New Year to a $18 discount against the international price,” he added.
($1 = 86.8975 Indian rupees)
(Reporting by Brijesh Patel and Rajendra Jadhav, additional reporting by Anjana Anil; Editing by Veronica Brown and Bernadette Baum)
