The latest trade data for India and China show that gold imports remained weak in October. We had always thought that demand in India would soften in the second half of the year as a result of the new tax regime. In China, demand usually picks up ahead of the Lunar New Year holiday but wholesalers appear to have ample stocks, meaning that imports are likely to remain low compared to previous years. Overall, physical demand from the key consumers is unlikely to provide much support to gold prices, which underpins our view that prices will edge lower over the coming months.
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