International gold prices reached a new record high in early March, rising well above US$2,100/oz and increasing more than 6% m-t-d. Weaker economic data in the US, a decline in the USD, a fall in US Treasury yields, and geopolitical tensions all helped push up the price of goldDomestic gold prices also rose to all-time highs, reaching INR 66,529/10g2 in March, up 4% m-t-d- a slightly lower percentage increase than the USD counterpart due to INR strength
The gold price surge has dented consumer demand; as a consequence, the domestic gold price is now trading at a discount of around US$20/oz to the international price
The price surge presents headwinds for gold demand, even in the face of the ongoing wedding season
The RBI added 4.7t of gold in February, taking its gold reserves to an all-time high of 817t
Indian gold ETFs saw inflows of US$93.3mn in February, the strongest monthly inflow for six months
February saw a sharp rise in gold imports.