Gold's Record Rally Sparks Selling Frenzy in Asia

The unprecedented surge in gold prices has led to a significant increase in the selling of old jewellery and coins across Asia. This trend, if continued, may reduce imports into major markets and potentially slow down gold's rally, according to retailers and industry experts.

Unprecedented Price Surge

Spot gold surpassed $3,000 an ounce for the first time on March 14, with year-to-date gains exceeding 15%. This remarkable increase, fueled by political and financial uncertainties, follows a nearly 30% rise in 2024.

Impact on Major Markets

In India, the largest bullion market, domestic gold prices have risen over 32% since the government reduced import duties in July. "If prices remain high, India's gold demand could drop by more than 30% in 2025," predicts Prithviraj Kothari of the India Bullion and Jewellers Association.

Wedding Season Affected

Despite the ongoing wedding season in India, jewellers report less than half their usual customer traffic. Many, like bride-to-be Vaishnavi M., are choosing to exchange old jewellery for new to manage costs amid soaring prices.

Global Trends

Similar patterns are observed in China and the Middle East, with consumers opting for cheaper alternatives or selling existing gold. "The value of jewellery bought last year increased, despite lower volumes," notes Andrew Naylor of the World Gold Council.

Looking Ahead

While investment demand for bullion is expected to stay strong, the outlook for jewellery demand remains bleak, highlighting gold's dual role as a cultural commodity and financial asset.