Gold Rush: Indian Buyers Continue Festive Purchases Despite Record Prices

Indian consumers are purchasing gold during Diwali and Dhanteras despite record-high prices, drawn by better returns compared to the cooling stock market. This robust demand may influence global prices and India's trade deficit, while also prompting a shift towards portfolio diversification in precious metals.

Indian consumers are defying record-high gold prices, purchasing the precious metal for Dhanteras and Diwali festivities despite the surge. Industry officials note that enthusiasm for gold, driven by favorable returns compared to a cooling stock market, is propelling robust demand.

Such fervor from the world's second-largest gold market could sustain global prices, which climbed to new highs. Yet, this increased demand for gold imports risks widening India's trade deficit and exerting pressure on the rupee.

Local gold prices recently peaked at 78,919 rupees per 10 grams, while India's stock index, NSE Nifty 50, has declined by about 7% since a record high in September. Portfolio diversification, with heightened allotments to gold and silver, remains a strategic focus for investors.

(With inputs from agencies.)