Gold demand in India remains strong, even with local prices hitting record highs, largely due to religious festivals, reports Commerzbank. Gold premiums have increased to $25 per troy ounce from $15 the week before, fueled by a surge in investor interest. Jewelry shops stocked up on small gold coins and bars for Dhanteras and Diwali, as giving gold during these celebrations is a long-standing tradition. However, demand is likely to drop after the festivities, which may lead to a decline in premiums.

Swiss Gold Exports

In September, Swiss gold exports to India nearly doubled to 30 tons, marking the highest level this year. This reflects strong demand leading up to the festivals, as noted in reports from the Federal Customs Administration. Interest in gold investments in India is high, partly because of the recent Dhanteras and Diwali celebrations. This enthusiasm has driven local premiums to $25 over the official price. The World Gold Council’s recent data indicates that investment in gold bars and coins rose by 12% in the third quarter of 2025 compared to last year. We think this festival-driven buying will likely slow in the coming days. Once the holidays end, the current price rise may not last. Reports from last week show that speculative net-long positions in gold futures are at a five-month high, which often indicates a period of price stabilization is upcoming.

Derivative Trading Strategies

The physical gold market is ready to meet demand, as Swiss gold exports to India nearly doubled in September. This is the highest monthly level recorded this year, suggesting that dealers prepared well for the festival. Looking at price trends in 2023 and 2024, we noticed that gold often slows down in the weeks following Diwali. For derivative traders, now might be the time to be cautious about chasing higher prices. This could be a chance to adopt strategies that benefit from a pause or slight pullback, like selling out-of-the-money call options against current long positions. This method allows investors to collect premiums while anticipating a potential break in the upward trend. Create your live VT Markets account and start trading now.

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