Lower Gold Prices Support India's Festive Buying

Lower gold prices are supporting India's festive and wedding buying, the World Gold Council reported on October 20. Manufacturers describe healthy orders as retailers replenish inventories, while industry feedback points to improving store traffic. For those of us holding bullion, that is evidence of jewellery buyers responding to a pullback. The Council calls the seasonal backdrop favourable, although it cautions that prices remain high enough to restrict growth in the amount of gold purchased.

Domestic discounts narrowed from a September average of US$66 an ounce to US$8 an ounce as of October 16, according to WGC's October 20 update. That means local gold was trading closer to the cost of importing it, which WGC attributes to improving seasonal demand. The remaining discount still indicates adequate domestic supply. We would therefore read the change as a firmer physical market, with buyers absorbing available metal while local prices remain below import parity.

Does a busier jewellery shop mean more gold has to enter India? The Council says old-gold exchanges remain an important source of domestic supply, with jewellers offering incentives to trade existing holdings for new pieces. Retailers are also promoting lighter jewellery. The Council's October 16 China retailer report showed spending rising while tonnage fell, a split we covered in China's Gold Jewellery Buyers Spend More for Less Metal. For you, stronger sales become a more convincing bullion signal when they come with greater tonnage: fresh designs and recycled metal can support shop activity without an equivalent increase in demand for additional bullion.

The Council also reports that bar and coin demand has moderated as price momentum eased, tempering investment buying associated with the earlier rally. That leaves us with different responses to the same pullback: lower prices are encouraging seasonal jewellery purchases while investment buying has softened. If you own gold, the jewellery improvement gives you another source of demand, but the report does not establish that it offsets weaker bar and coin buying. Its industry feedback gives us an early direction for the season; we would still need measured holiday volumes to judge its size.

For tradable bullion exposure, State Street describes SPDR Gold Shares, ticker GLD, as seeking to reflect gold bullion prices less expenses. Stronger physical demand could support that exposure if the seasonal recovery continues. You still face losses if bullion prices fall, and fund expenses reduce returns. We would keep this report in the case for holding bullion while waiting for evidence that the recovery extends beyond restocking and store traffic. Jewellery activity alone gives us too little evidence to increase our demand estimate.

By November 6, we will check for updated WGC evidence on Indian jewellery volumes, domestic discounts and the contribution of recycled gold.

Seek the truth and be prepared,

Equedia News

Sources

• World Gold Council, 2026 Chinese jewellery retailer insights: Confidence check, October 16, 2026
• World Gold Council, India gold market update: Seasonal demand shows early strength, October 20, 2026
• Equedia News, China's Gold Jewellery Buyers Spend More for Less Metal, October 16, 2026
• State Street Investment Management, SPDR Gold Shares product page, accessed October 20, 2026

Disclaimer: This letter is for informational and educational purposes only and does not constitute investment advice. Past predictions and performance are not indicative of future results. We own gold and gold stocks. Please see our full terms of use and disclaimer at equedia.com.