Gold rallies on rate optimism as India’s import curbs hit silver

The rally follows a broader decline in oil prices and a shifting outlook for Federal Reserve policy. With Brent crude slipping below $85 per barrel, analysts at Heraeus suggest that if supply routes through the Strait of Hormuz stabilize, the resulting drop in consumer costs could weaken the argument for further monetary tightening. This sentiment has provided a significant tailwind for precious metals, which have struggled under the weight of high interest rate expectations throughout the summer.

Official sector demand remains a primary pillar of support for gold. Central bank reserves grew by a net 51 tonnes in June, nearly doubling the 12-month average of 27 tonnes. Poland and China led the accumulation, adding 19 and 15 tonnes respectively, while Russia and Turkey opted to liquidate portions of their holdings. Despite these sales, total net buying reached 102 tonnes for the first half of the year.

In contrast, the silver market faces structural headwinds in India. New government measures, including higher customs duties and mandatory import approvals, have decimated local intake. Imports plummeted to just 1.04 million ounces in July, a 92% decline compared to the same period in 2025. Because India accounts for nearly one-fifth of global silver demand, these restrictive policies are creating a localized supply crunch, driving domestic premiums to $6.50 per ounce even as global prices attempt to reclaim the $65 level.