Commerzbank: Modi's Push for Domestic Production May Hit Gold Demand

Commerzbank has indicated that Indian demand for gold may face risks following Prime Minister Modi's recent call for a shift towards domestic production and reduced reliance on imports. This shift could impact gold prices through a change in capital flows and demand dynamics, as India is one of the largest consumers of gold globally. The Indian gold market is particularly sensitive to policy changes, and any reduction in demand could lead to downward pressure on prices. Traders will be closely watching upcoming government policies and initiatives aimed at promoting domestic production as a key catalyst for potential shifts in gold demand.

Gold (XAU/USD) is a safe-haven asset and inflation hedge. Major drivers include Fed policy (real yields), central bank buying (PBOC, RBI), ETF flows, and geopolitical risk. Gold often moves inversely to DXY and real US yields.

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