Gold traded at a premium in India this week for the first time in more than three months, as lower prices brought jewellery buyers back ahead of the festive and wedding season. Lower imports have also tightened local supply.
At a glance
- Dealers charged premiums of up to $7 an ounce, after discounts of up to $6 a week earlier.
- Domestic gold traded around ₹1,48,200 per 10 grams on Friday, after a two-week low of ₹1,45,627.
- In China, bullion traded at premiums of $4 to $13 an ounce, but buying stayed subdued.
Background
Indian dealers price gold against the official domestic rate, which already includes the 15% import duty and a 3% sales levy. When buyers are scarce, dealers offer a discount to that rate; when demand outpaces supply, they charge a premium. A switch from discount to premium is a quick signal that physical demand has strengthened.
What happened
Dealers in India quoted premiums of up to $7 an ounce over official domestic prices this week, compared with discounts of up to $6 last week, Reuters reported. It was the first premium in more than three months.
Domestic gold prices were around ₹1,48,200 per 10 grams on Friday. Earlier in the week they touched a two-week low of ₹1,45,627, which helped bring buyers back.
Why demand picked up
The festive and wedding season is starting, and the price dip encouraged jewellery purchases. Chanda Venkatesh, managing director of Hyderabad bullion merchant CapsGold, said jewellery demand is picking up as the season kicks in. "But investors are still holding back as prices continue to fall," Venkatesh added.
Supply is also tighter than usual. Gold imports normally rise ahead of the festivals, but inflows have been lower this year, a Mumbai-based dealer at a private bank said. India's September gold imports fell to $1.8 billion from $9.6 billion a year earlier.
What it means for buyers
Jewellery shoppers are now paying slightly above the official rate rather than getting a discount. Investment demand remains cautious, and several large Indian mutual funds have suspended bulk subscriptions to gold ETFs ahead of the festive season.
Elsewhere in Asia, demand stayed soft. Chinese buyers remained cautious as prices swung in a wide range, said Bernard Sin of MKS PAMP, though bullion there traded at premiums of $4 to $13 an ounce.
Our read
Outlook: bullish. A swing to premiums shows physical demand is recovering in the world's second-largest gold consumer. Investment demand is still weak.
What to watch
- Whether premiums widen as Dussehra and Diwali approach.
- October gold import data, which will show whether supply catches up with festive demand.
- When fund houses reopen subscriptions to gold ETFs and fund-of-funds.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-23.
Detailed analysis
Timeline
- 2026-10-16: Indian dealers quote gold premiums of up to $7 an ounce, the first in over three months.
Demand Drivers
Lower prices and the start of the festive and wedding season are lifting jewellery purchases.
Supply Drivers
Lower-than-usual imports have tightened domestic gold supply ahead of the festivals.
Government Policies
Domestic prices include a 15% import duty and 3% sales levies, which keep imports subdued.
What could lift prices
- Festive and wedding demand is just beginning in India.
- Tight domestic supply after weak imports supports premiums.
What could weigh on prices
- Investors are still holding back as prices fall, CapsGold says.
- Chinese buying remains subdued despite premiums.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | High | Physical demand has recovered enough to flip discounts into premiums. |
| China | Medium | Buying stays cautious despite premiums of $4 to $13 an ounce. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Jewellery | Positive | Jewellery demand is picking up with the start of the festive season. |
Who gains, who loses
- Bullion dealers in India: They can now charge premiums instead of offering discounts.
- Jewellery buyers: They pay up to $7 an ounce above the official rate instead of getting a discount.
Other ways this could play out
- If imports stay low into Diwali, premiums could widen further.
- If global prices rebound sharply, jewellery buyers could pull back again.
Price risks
- A Fed rate hike could push global prices lower and change local demand.
- A rebound in imports would ease the domestic premium.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
India
China