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By: Rhona O'Connell, Head of Market Analysis
Gold demand is shifting as volatility and policy signals reshape participation across key regions. Gold markets are no longer supported by uniform buying, with China and India moving in opposite directions. This divergence is creating a more fragmented demand base at a time when gold prices are already under pressure. Consequently, the balance between these two major consumers is becoming increasingly important for price stability.
Rhona O’Connell, Head of Market Analysis EMEA and Asia at StoneX, has extensive experience analyzing precious metals demand across Asian markets. Her insight into regional buying trends provides a clear view of how shifts in China and India are influencing global gold demand.
China gold demand is weakening as financial institutions respond to rising volatility and risk. Rhona O’Connell explains that "the four major banks in mainland China... are putting it out that people need to be very careful with the volatility in precious metals markets", signaling a clear shift in sentiment. Consequently, this caution is likely to reduce participation from both retail and institutional investors, limiting demand strength. As a result, China gold demand may remain subdued, removing a key pillar of global price support.
India gold demand is strengthening as new supply routes improve availability and support buying activity. Rhona O’Connell notes that "it is now starting to find its way into India... coming from Latin America via Sao Paulo... and also from West Africa", highlighting a shift in global flows. Consequently, this increased access is helping sustain demand even as prices remain volatile. Over time, India gold demand could play a larger role in stabilizing the market if these inflows continue.
Chinese banks are warning about volatility and tightening activity, which is reducing participation and weakening demand.
India is benefiting from increased supply through alternative routes, improving availability, and supporting buying activity.
Gold prices may become more dependent on regional demand shifts, with India partially offsetting weaker demand from China.
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--- Written by Lindo Xulu, StoneX TV Journalist
--- Expert: Rhona O’Connell, Head of Market Analysis EMEA and Asia at StoneX
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