Asia's gold inflows reach USD 438 mn in July

Asia continued its streak of attracting gold investments, extending its inflow momentum to 17 consecutive months with a USD 438 million influx in July, according to World Gold Council report.

India emerged as the frontrunner in these inflows, after the reduction in gold import duty to 6 per cent from 15 per cent following the announcement in the Union Budget.

As of July 23, India’s import duty on gold was reduced to 6 per cent from 15 per cent. This change has impacted the gold market, contributing to a strong year-to-date (y-t-d) performance.

In July, gold prices reached Rs 65,314 per 10 grams, marking a 4.5 per cent return for the month and a 17.5 per cent y-t-d return. This robust performance has been a major factor driving inflows into Indian gold ETFs, as investors capitalized on the favorable market conditions.

These measures have made the investment landscape for gold Exchange Traded Funds (ETFs) more equitable and attractive, further enhancing the allure of gold as an investment. Additionally, the strong performance of gold in the local currency added to the momentum, making it a preferred asset class for Indian investors.

Following a slight dip in June, gold staged a recovery in July, closing the month 4 per cent higher at USD 2,426 per ounce. The precious metal even hit an all-time high of USD 2,480 per ounce mid-month before experiencing a modest decline towards the end.