Gold demand has hit a significant roadblock in Asia’s key markets as prices reach unprecedented levels, with India’s domestic gold price touching 84,910 rupees per 10 grams.
This represents a dramatic rise of over 10% in 2025, following a 21% increase in 2024. The price surge has led to substantial market disruptions, with Indian dealers offering discounts up to $31 an ounce over domestic prices, while Chinese markets show discounts of $7-$10 per ounce.
The situation is further complicated by supply dynamics, as bullion banks redirect gold shipments to the U.S. market to take advantage of higher futures premiums, leading to supply constraints in Asian markets that could potentially drive discounts even higher under normal conditions.