Despite a surge in gold prices last year, physical demand for gold fell precipitously, noted James O’Rourke, Commodities Economist, at Capital Economics. They think that a brighter economic outlook will boost consumer demand this year and help to prop up the gold price.
Key Quotes:
“We anticipate a strong economic recovery in India this year, which will support physical gold demand. Indeed, India’s Finance Ministry has finally announced significant fiscal stimulus, which will bolster demand.”
“We expect demand to return to more normal levels in China, the world’s largest consumer of physical gold. Indeed, the premium in the local gold price (see Chart 4) suggests that demand is already recovering as the Lunar New Year holiday, typically a period of strong physical gold demand, approaches. This strength comes despite a subdued start to the festive season.”
“We reckon that a revival in jewellery consumption in key consumers India and China will put a floor under the gold price this year, even as investment demand for gold eases back slightly.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks

EUR/USD stays under pressure below 1.1600 after US data
EUR/USD extends its daily slide and trades deep in the red below 1.1600 in the American session on Thursday. The US Dollar (USD) benefits from the better-than-expected Jobless Claims and Retail Sales data, not allowing the pair to hold its ground.

GBP/USD struggles to hold above 1.3400 on renewed USD strength
GBP/USD fails to build on Wednesday's gains and trades in negative territory near 1.3400 on Thursday. Although Pound Sterling stays resilient on the back of UK employment report, the renewed USD strength following upbeat US data caps the pair's upside.

Gold extends daily slide after US data, trades below $3,320
Gold continues to pull away from the multi-week high it set above $3,370 and trades below $3,320 on Thursday. The US Dollar benefits from the upbeat weekly Initial Jobless Claims and June Retail Sales reading, forcing XAU/USD to stay on the back foot.

Top Crypto Gainers: FLOKI, BONK post double-digit gains, CRV targets $1
Solana-based meme coins Floki and Bonk edged lower by 2% at press time on Thursday, following the 30% gains on Wednesday, ranking as top crypto gainers in the last 24 hours. Curve DAO ranks third with a 21% surge following a triangle setup breakout, targeting the $1 psychological level.

China’s first-half growth remains on track, though activity data signals caution
China's second-quarter GDP beat forecasts again with a 5.2% year-on-year growth, driven by strong trade and industrial production. Yet sharper-than-expected slowdowns in fixed-asset investment and retail sales and falling property prices are a concern.

Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.