Mumbai: Gold demand across key Asian markets remained subdued this week as consumers in India and China continued to stay cautious amid volatile prices and economic uncertainty. While gold remains a preferred investment asset for many, sharp fluctuations in prices have discouraged jewellery buyers and reduced physical purchases in some of the world's largest gold consuming nations.
In India, dealers reported weak customer activity despite recent movements in global gold prices. Retail buyers have largely stayed on the sidelines, waiting for greater stability before making significant purchases. Traders said uncertainty over future price movements has made consumers hesitant, especially when prices continue to change rapidly from one week to another.
The slowdown has forced many dealers to offer larger discounts to attract buyers. Market participants noted that discounts in the Indian market widened significantly this week as jewellers struggled to boost sales. Many retailers are also limiting fresh inventory purchases, preferring to wait for clearer signals on price direction.
Industry experts say that consumers generally prefer buying gold when prices remain stable rather than during periods of extreme volatility. Even though gold continues to be viewed as a safe investment, uncertainty over short term price movements has reduced enthusiasm among jewellery buyers.
India's gold market is also adjusting to higher import duties introduced by the government. The increased costs have added pressure on retail demand, particularly among price sensitive consumers. As a result, many households have postponed purchases that would normally take place during wedding seasons and festive periods.
Despite weaker jewellery demand, investment interest in gold remains strong. Recent figures from the World Gold Council showed that India's overall gold demand increased during the first quarter of 2026, mainly because investors continued to buy gold bars, coins and other investment products. Investment demand rose sharply compared with the same period last year, helping offset a decline in jewellery consumption.
In China, physical gold demand also showed signs of moderation. Premiums charged on gold purchases narrowed during the week, indicating that buying activity has cooled compared with earlier months. Market analysts said demand remains positive but is no longer as strong as it was when investors rushed to gold amid global economic concerns.
Chinese jewellery demand has entered a seasonal slowdown, with many consumers directing their spending toward travel, leisure activities and other experiences. However, investment demand remains relatively healthy as investors continue to seek protection against economic and financial risks.
The People's Bank of China has also continued to increase its gold reserves, extending a buying trend that has lasted for more than a year. Central bank purchases have become an important source of support for the global gold market and have helped maintain confidence in the precious metal.
Globally, gold prices have been influenced by several competing factors. Concerns about inflation, interest rate expectations in the United States and geopolitical tensions have all contributed to market volatility. Rising oil prices and uncertainty surrounding future monetary policy decisions have also affected investor sentiment.
Although physical demand in Asia has weakened in recent weeks, many analysts remain optimistic about gold's long term prospects. Major financial institutions believe that continued central bank purchases, geopolitical uncertainties and strong investment demand could provide support for prices throughout the remainder of 2026.
For now, however, consumers in Asia appear to be waiting for calmer market conditions before returning to jewellery stores in larger numbers. Until price movements become more predictable, physical gold demand is likely to remain cautious across the region, even as investors continue to view gold as a valuable safe haven asset.