What are local premiums telling us about gold demand?

Negative gold premiums, the difference between local prices and international benchmarks, in India have prompted fears of a slowdown in consumption from one of the largest market players. While a weak monsoon and fewer festive days have certainly weighed on India’s gold demand so far this year, we expect buying in India and China to pick up ahead of the Diwalifestival on 11th November and the Chinese New Year in February.