India Faces Gold Supply Crunch from Import Delays

India's gold premiums have surged to their highest in over two and a half months, exceeding $15 an ounce. This sharp increase stems not from overwhelming demand, but from significant import disruptions and lingering tax uncertainties. Indian banks experienced major delays after a late government authorization order, leaving substantial gold shipments stuck at customs. Although new import authorizations are now in place effective April 1, 2026, ambiguity over applicable taxes continues to slow down imports. This bottleneck has directly led dealers to quote higher prices, a stark contrast to the discounts seen just last week.

Customs Hold-ups and Tax Confusion Plague Indian Market

This month, Indian banks had to halt gold and silver shipments because the government's authorization order was delayed. This resulted in over five metric tons of gold and around eight tons of silver being held up at customs facilities. While the authorization was issued on April 17, 2026, allowing 15 banks to import precious metals until March 2029, questions about tax rates are still hindering a full import restart. These regulatory snags have historically impacted Indian gold prices and trade deficits. Additional curbs on gold and silver jewelry imports, effective April 2, 2026, also aim to prevent Free Trade Agreement misuse, adding further complexity.

China's Physical Demand Shows Renewed Strength

Meanwhile, China, another major global gold consumer, is seeing a notable rise in physical demand. Gold in Shanghai is now trading at premiums of $9 to $12 an ounce over the global benchmark, up significantly from $3 to $6 premiums last week. This indicates stronger buying interest at current price levels. This robust physical demand in China stands apart from softer retail buying in India following the Akshaya Tritiya festival on April 19, where demand remains sensitive to prices below 150,000 rupees per 10 grams.

Global Pressures and Shifting Analyst Views

Globally, spot gold prices are set for a weekly decline, ending a four-week winning streak. High oil prices, fueled by Middle East tensions and disruptions near the Strait of Hormuz, are raising inflation concerns. International spot gold prices were around $4,671.85 per troy ounce on April 24, 2026. This environment has prompted analyst revisions. Morgan Stanley lowered its gold price target for the second half of 2026 to $5,200 an ounce from $5,700, citing supply shocks and rising real interest rates. Analysts are increasingly viewing gold as an indicator of liquidity and monetary policy rather than solely a safe-haven asset. However, forecasts for the end of 2026 remain optimistic, with ranges from $5,400 (Goldman Sachs) to $6,300 (J.P. Morgan and Wells Fargo). The strength of the US dollar is also currently weighing on gold prices.

Market Outlook and Risk Factors

Analysts expect gold prices to trade within a range in the near term, potentially leaning slightly lower until central bank rate path signals become clearer. Key support is seen around $4,700 an ounce, with resistance near $4,895. Looking ahead to late 2026, more optimistic views predict prices between $5,400 and $6,300 an ounce, supported by ongoing central bank purchases and concerns about currency debasement. The immediate price action will likely depend on Middle East developments, oil price movements, and US Federal Reserve policy signals. Gold's price is heavily influenced by these global financial and geopolitical factors, making it vulnerable to rapid sentiment shifts.