India gold demand collapse on duty hike
Key Questions
How much has India’s gold demand fallen after the duty increase?
Demand plunged 70% following the import duty hike to 15% (effective rate 18.45%). This represents a significant demand-side headwind for the physical market.
What risks could arise from the sharp drop in Indian gold imports?
Lower official imports may encourage smuggling and could eventually prompt a policy reversal. Sustained weakness challenges the bullish demand narrative.
How does the RBI’s gold selling relate to the demand collapse?
The RBI sold roughly $12 billion in gold to defend the rupee, compounding the bearish pressure from reduced private demand. This dual effect increases near-term downside risk for prices.
India's gold demand plunged 70% after import duty doubled to 15% (effective 18.45%), creating a major demand-side headwind. Could spur smuggling and eventual policy reversal. Challenges bullish narrative if sustained. RBI also selling $12B gold to defend rupee, adding to bearish pressure from India.