Feb 13, 2025
A significant surge in global gold prices has reached record highs, creating challenges for jewelry purchases during India’s wedding season, while in China, dealers are offering discounts to attract buyers. According to reports, benchmark gold prices hit an unprecedented $2,942.70 an ounce amid concerns over a potential global trade war, partly fueled by new US tariff proposals.
With India being the second-largest gold consumer globally, gold plays a vital role in wedding traditions. However, the soaring prices have stalled consumer purchases. B Muthuvenkatram, a jeweler based in Coimbatore, highlighted that many customers are delaying their gold purchases, hoping for a price drop. Surendra Mehta from the India Bullion and Jewellers Association noted that current jewelry demand has plummeted by 70-80% nationwide.
Domestic gold prices in India reached an all-time high of 86,360 Indian rupees ($993.81) per 10 grams, marking a more than 10% increase in 2025, following a 21% rise in 2024. The elevated prices have impacted demand severely, with Indian dealers reducing prices slightly through offering discounts ranging between $30 and $38 an ounce.
In China, the world’s largest gold consumer, the demand pattern mirrored India’s, with discounts offered between $7 and $10 per ounce to counteract dwindling sales due to high gold prices. Analysts have observed that post-Chinese New Year, the demand for physical gold in China and Hong Kong has seen a significant decline.
Both nations, China and India, combined, account for over half of the global consumer demand for gold. However, despite the reduced demand for physical jewelry, there is increased activity in gold ETFs and central bank purchases, as explained by market analysts.
According to IndexBox, India’s jewelry consumption in 2024 was 563.4 metric tons, exceeding China’s 511.4 tons, yet the current market conditions underscore a shift as consumers adapt to the fluctuating gold prices worldwide.
Source: IndexBox Market Intelligence Platform