A stronger US dollar, which touched its highest level since March 4 at 104.3, led gold prices to fall 0.57% to settle at ₹87,278, its lowest since March 4. Traders priced in a rate cut of about 63 basis points for 2024 after the Federal Reserve’s stance on deferring interest rate hikes due to economic uncertainty and emphasised the difficulty in weighing inflation risks against potential economic slowdowns caused by new tax measures.
Discounts on gold have hit an eight-month high of $41 an ounce over domestic prices, up from $39 last week, indicating a sharp decline in demand in India. Imports fell to their lowest level in two decades in February and are forecast to fall 85% year-on-year. The Chinese gold market witnessed discounts ranging from $2 to $16 per ounce.
According to the World Gold Council, India’s gold consumption will fall to 700–800 metric tons in 2025, down from the country’s nine-year low of 802.8 tons the previous year. While the jewelry market, which contributes 70% of overall consumption, may shrink as a result of record prices, demand for ETFs, digital gold, and physical gold investments remains high.
