Asian Gold Demand Crumbles Under High Prices, Indian Imports Hit 20-Year Low

Record gold prices are significantly impacting the Asian market, with India seeing discounts reach an eight-month high of $41 per ounce as demand plummeted. Domestic Indian gold prices surged to an unprecedented 89,796 rupees per 10 grams, climbing more than 15% since the beginning of the year. This price surge has caused Indian gold imports to collapse by 85% in February compared to last year, reaching a 20-year low.

Similar patterns are evident in China, where gold traded at discounts of $2-$16 under spot prices. China’s overall gold consumption in 2024 fell 9.58% year-on-year to 985.31 metric tons, with jewelry purchases (representing half the market) plunging 24.7% to 532.02 tons. Despite retail weakness, Chinese institutional investors continue to show strong interest in gold ETFs, and the central bank maintains modest gold accumulation.

Other Asian markets showed varied responses, with Singapore trading at premiums of $1.80-$2.50, Hong Kong offering premiums between $0.50-$2.00, and Japan selling between a $1.00 premium and a $5.50 discount.