Gold Rates Sharply Bullish In Global Markets: Retail Demand Sluggish In India

Gold rates are sharply bullish in the global markets and investors are flocking to the yellow metal. However, in India, retail demand for gold was sluggish in March. Buyers postponed purchases anticipating the rates will fall after the Russia-Ukraine war will be over. The latest World Gold Council (WGC) report stated, "Interactions with trade also highlighted higher recycling in March as the gold price surged. Combined sluggish demand and higher recycling volumes led to official gold imports falling 80% m-o-m and the local gold price discount widening to US$60/oz from a discount of US$14-15/oz at the end of February. Indian gold ETFs witnessed marginal inflows of 0.2t in March, primarily driven by the correction in the gold price which might have spurred investor interest."

Earlier, the investors wanted high-quality safe havens like gold as the equity markets were very volatile, coupled with a high inflation rate. Commenting about the global gold market scenario, the WGC report additionally mentioned, "Gold leapt 8% in Q1, its best quarterly performance since Q2 2020, after gold rose a further 2% in March. Rapidly rising inflation and unexpected geopolitical risks more than offset the drag from higher nominal rates. Inflows into gold ETFs totaled 269t (US$17bn) in Q1, the highest quarterly total since Q3 2020, while Q1 US Mint gold coin sales hit the highest level since 1999."

The Comex gold futures were quoted at $1950.40/oz, gaining by 0.65%, till last traded. Yesterday it was last quoted at $1937.80/oz. The spot gold prices are quoted at $1947.70/oz, gaining by 0.80%, till last traded. On the other hand, the US dollar index in the spot market stood at 99.84, surging by 0.27%. In India, the MCX gold in June future was quoted at Rs. 52,099 grams, gaining only by 0.39%, till last traded.