Insights 
VT 
Gold demand in India has remained strong despite record high local prices, driven by religious festivals, according to Commerzbank. Gold premiums rose to $25 per troy ounce, up from $15 the previous week, amidst increased investor interest.
Jewelers had stocked up on small denomination coins and bars for Dhanteras and Diwali, as gifting gold during these festivals is a tradition. Demand is expected to decrease post-festivities, possibly leading to a fall in premiums.
Swiss Gold Exports
Swiss gold exports to India nearly doubled to 30 tons in September, the highest level this year, indicating robust demand ahead of the festivals. This increase was highlighted by data from the Federal Customs Administration.
We are seeing strong investor interest in India for gold, driven by the religious festivals of Dhanteras and Diwali which just passed. This demand has pushed local premiums to a high of $25 per ounce over the official price. Recent data from the World Gold Council confirms this trend, showing Indian investment demand for bars and coins in the third quarter of 2025 rose by 12% compared to the same period last year.
In our opinion, this festival-driven buying is likely to slow down in the coming days and weeks. This suggests the current price strength may be temporary, as the primary catalyst fades now that the holidays are over. Commitment of Traders reports from last week show that speculative net-long positions in gold futures are at a five-month high, which often precedes a period of price consolidation.
Derivative Trading Strategies
The physical market appears well-supplied to meet this demand, as Swiss gold exports to India already nearly doubled to 30 tons in September. This was the highest monthly level this year, indicating that bullion dealers stocked up well in advance of the festival. Looking back at the price action in 2023 and 2024, we observed a similar pattern where gold’s momentum often slowed in the immediate weeks following Diwali.
For derivative traders, this could signal a time to be cautious about chasing the price higher. It may be an opportunity to consider strategies that profit from a pause or a slight pullback, such as selling out-of-the-money call options against existing long positions. This approach allows one to collect premium while anticipating that the powerful upward trend might take a break.
