Gold: Demand in China and India has more of a stabilising than amplifying effect on prices – Commerzbank

Economists at Commerzbank analyze Gold demand in China and India – the two largest Gold consumer countries.

Weak Gold demand in China and India due to high prices

In view of or despite record-high local Gold prices, China and India – the two largest gold consumer countries – have taken steps to curb Gold imports.

The premium on the global market price reached $19 per troy ounce on Friday, bringing it closer to the six-year high of over $25 per troy ounce that it chalked up in September 2022. This could further slow Gold demand in China, which is weaker in the summer months in any case.

China and India combined account for roughly half of physical Gold demand. The behaviour of Gold buyers there, which tends to be anticyclical with respect to the price, thus has more of a stabilising than amplifying effect on prices.

See – Gold Price Forecast: XAU/USD could head to its all-time high in the coming year – Commerzbank