Gold demand in India picked up in the latter half of the week, but still remained below average as prices moved down from record highs.

Meanwhile, traders in China continued to offer discounts amidst lackluster activity, according to a Reuters report.

“Demand has started to trickle in as prices come down, but many buyers remain on the sidelines,” a jeweller based in Ahmedabad, India was quoted in the report.

Jewellery sales down

On Thursday, Invezz reported that retail gold jewellery sales in India were down 70-80% in the first couple of months this year. 

“As of mid-February 2025, Indian gold dealers are offering discounts of $30 to $38 per ounce compared to international prices, primarily due to high domestic prices and subdued demand during the wedding season,” Prithviraj Kothari, managing director of RiddiSiddhi Bullions Limited (RSBL) told Invezz.

Gold prices in India reached a record high of 86,592 rupees per 10 grams last week, but have since fallen to around 84,750 rupees as of Friday.

Indian dealers this week have reduced the discount on gold prices. 

Discounts ease

They are now offering a discount of $12-$27 an ounce over official domestic prices, which includes a 6% import duty and a 3% sales tax. 

This is a decrease from the $35 discount offered last week, according to the report.

A Mumbai-based dealer with a bullion importing bank said:

Supplies are tightening as there were hardly any imports by banks this month. Discounts are decreasing.

Kumar Jain, the owner of Umedmal Tilokchand Zaveri stores in Mumbai told Invezz that gold imports were just around 15 tons this month, which was significantly down from the same period last year. 

Record high prices of gold have weighed on imports and has created an acute shortage in the country. 

India’s gold imports are expected to experience a significant decline in February, plummeting by 85% compared to the same period last year. 

This drastic reduction is projected to result in the lowest import levels in two decades.

Jewellers had told Invezz that consumers are currently recycling their old gold instead of purchasing new ones.

People are also opting for lighter carat jewellery because of higher prices.  

Southeast Asia

Meanwhile, in China, the world’s leading gold consumer, the precious metal was trading at a discount of $3 compared to spot prices.

This indicates a weaker demand for gold in the Chinese market.

“There is virtually risk free profit in shipping bars to CME registered vaults in New York just now and this is draining physical liquidity from other markets,” independent analyst Ross Norman told Reuters.

Gold was being offered by dealers in Hong Kong at between a discount of $1.80 and a premium of $2.30 per ounce.

In Singapore, a dealer stated that gold was trading at between a discount of $0.50 and a premium of $3.

Bullion in Japan was sold at a discount as high as $6 and a premium as high as $1.5.

A Tokyo-based trader said that people are waiting for prices to drop before buying, which has resulted in sales volume exceeding buybacks.

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Inflation showed a modest decline in January, even as concerns grew over President Donald Trump’s proposed tariffs.

The personal consumption expenditures (PCE) price index, which serves as the Federal Reserve’s preferred inflation gauge, rose 0.3% for the month and registered a 2.5% annual increase, according to data released by the Commerce Department on Friday.

Excluding food and energy, the core PCE index—a key measure for Fed officials—also increased 0.3% monthly, bringing its annual rate to 2.6%, a slight decline from 2.9% in December.

Income rises, but spending declines

The report also revealed unexpected shifts in income and spending.

Personal income surged 0.9% for the month, significantly outpacing the forecasted 0.4% increase.

However, this rise in earnings did not translate into higher consumer spending, which instead declined by 0.2%, missing expectations of a 0.1% gain.

The personal savings rate climbed to 4.6%, suggesting that consumers may be adopting a more cautious approach to their finances despite rising incomes.

The weak consumer spending likely reflected the fading impact of front-loading purchases, as well as adverse weather conditions, including unseasonably cold temperatures and widespread snowstorms.

Additionally, wildfires in Los Angeles may have further dampened spending.

Severe winter storms also disrupted homebuilding and contributed to slower job growth last month.

The data align with expectations for a first-quarter economic slowdown, with most GDP estimates for the January-March period falling below a 2.0% annualized rate. This follows 2.3% growth in the fourth quarter.

Fed rate cut expectations rise

The data comes as Federal Reserve policymakers weigh their next move regarding interest rates.

While recent statements from Fed officials have expressed confidence that inflation is gradually moving lower, they have emphasized the need for more consistent evidence before making any adjustments to monetary policy.

Stock market futures reacted positively following the report, while Treasury yields edged lower.

In January, goods prices increased by 0.5%, largely driven by a 0.9% rise in motor vehicles and a 2% jump in gasoline prices.

Meanwhile, services prices rose by 0.2%, with housing costs seeing a 0.3% increase.

Despite these gains, the overall trend in inflation remains supportive of a potential shift in the Fed’s policy stance later in the year.

Following the report, traders slightly increased the odds of a rate cut in June, with market-implied probabilities rising to just over 70%, according to the CME Group’s FedWatch gauge.

While markets are still pricing in two rate cuts before the end of the year, expectations for a third reduction have gained traction in recent days.

Although the consumer price index (CPI)—released earlier in the month by the Bureau of Labor Statistics—tends to draw more public attention, the Fed prefers the PCE index due to its broader coverage, ability to adjust for changing consumer habits, and lower emphasis on housing costs.

For comparison, the January CPI report showed a 3% annual inflation rate, with core CPI at 3.3%.

Minutes from the Federal Reserve’s January 28-29 policy meeting, released last week, indicated concerns among policymakers about inflation risks tied to Trump’s initial policy proposals.

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Citigroup narrowly avoided what could have been one of the largest banking blunders in history after it mistakenly credited a client’s account with $81 trillion instead of the intended $280.

The Financial Times reported that the error was detected only after two employees overlooked it, with a third employee catching and correcting the mistake 90 minutes later.

Fortunately, no funds left the bank.

The US banking giant disclosed the incident to financial regulators, including the Federal Reserve and the Office of the Comptroller of the Currency, as part of its internal reporting procedures.

A near-impossible transaction

A transaction of $81 trillion is so vast that it would be unlikely to pass through any banking system without immediate red flags.

The sheer scale of the error was highlighted by comparisons with global financial benchmarks—the total US stock market was valued at $62 trillion at the end of 2024, while global wealth stood at approximately $450 trillion, according to UBS.

To put it into perspective, the erroneously credited sum would have been enough to buy all major US technology companies at a premium or acquire the assets of Elon Musk, the world’s richest individual, more than 200 times over.

A Citi spokesperson addressed the incident, stating, “Despite the fact that a payment of this size could not actually have been executed, our detective controls promptly identified the inputting error between two Citi ledger accounts and we reversed the entry. Our preventative controls would have also stopped any funds leaving the bank.”

“While there was no impact to the bank or our client, the episode underscores our continued efforts to continue eliminating manual processes and automating controls through our transformation,” the spokesperson added.

Citi’s history of costly errors

This is not the first time Citigroup has been at the center of an embarrassing transaction error.

In 2020, the bank mistakenly wired $900 million to creditors of Revlon instead of making a routine interest payment.

Several hedge funds, including Brigade Capital Management, HPS Investment Partners, and Symphony Asset Management, initially refused to return the funds, leading to a protracted legal battle.

Citi fought in court for two years to recover the money, with a significant portion remaining in dispute until a 2022 court ruling finally enabled the bank to reclaim the remaining $504 million from creditors.

The episode contributed to leadership changes at the bank, including the departure of then-CEO Michael Corbat.

Other instances of “accidental transfers” by banks

Citi is not the only bank to have blundered on the front of money transfer.

In 2021, a Louisiana couple found their Chase bank account credited with $50 billion due to a bank error.

It took four days for the bank to correct the mistake, making the couple one of the richest families in the world for a brief period.

“That’s not like a one zero error or a two zero error, that’s somebody that fell asleep on the keyboard error,” Darren James, the beneficiary of the amount told CNN in a report.

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The demand for precious metals like platinum and palladium is expected to decline if the proposed tariffs by President Donald Trump on US auto imports lead to a decrease in vehicle sales, according to a Reuters report. 

This potential decrease in demand is due to the fact that automakers would likely reduce their production if car sales are negatively impacted by the tariffs, which in turn would lower their need for these precious metals.

The tariffs could raise the prices of imported cars, making them less attractive to American consumers and potentially leading to a decrease in sales. 

This decrease in sales could then have a ripple effect on the entire automotive supply chain, including the demand for precious metals like platinum and palladium.

Analysts are closely monitoring the situation, as any significant decline in the demand for these precious metals could impact their prices and the companies that mine and produce them. 

At the beginning of this month, Trump announced that automobile tariffs could be implemented as early as April 2. 

Cost of imports will rise

If this happens, the cost of importing cars into the US would increase, and the demand for cars exported to the US could decrease.

The automotive industry is a major consumer of platinum and palladium, and any disruption in this sector could have far-reaching consequences for the precious metals market as well.

The impact is anticipated to extend to platinum group metals (PGMs), which include platinum, palladium, and rhodium. These metals are utilised in the exhaust systems of gas, diesel, and hybrid vehicles.

Zain Vawda, market analyst at MarketPulse by OANDA, said that tariffs typically fuel inflation and keep interest rates higher, which could slow economic growth and weaken demand for platinum and palladium.

The proposed tariffs are still under consideration, and their ultimate impact on the automotive industry and the demand for precious metals remains to be seen. 

Demand risks

However, analysts are warning that there is a significant risk of a decline in demand if the tariffs are implemented, and this could have a negative impact on the precious metals market.

The automotive industry plays a substantial role in the demand for platinum and palladium, accounting for approximately 40% of the global platinum consumption and a significant 80% of the global palladium offtake. 

This significant demand is primarily driven by the use of these precious metals in catalytic converters, which are essential components in vehicle exhaust systems for reducing harmful emissions.

Palladium, in particular, is predominantly used in gasoline-powered vehicles, while platinum finds application in both gasoline and diesel engines. 

The increasing stringency of emission regulations worldwide and the growing adoption of stricter emission control technologies have further fueled the demand for these precious metals in the automotive sector.

If tariffs on US auto imports are imposed, Vawda anticipates that global platinum demand will fall by 1% (around 102,000 ounces) and palladium demand will fall by 4% (364,000 ounces) this year.

Dependent on imports

The US auto industry relies heavily on imports of parts and fully assembled vehicles, especially from Canada and Mexico.

Barclays estimates that Mexico supplies up to 40% of the components used in US vehicles, while Canada contributes over 20%. 

Additionally, German auto giant Volkswagen manufactures approximately 75% of its North American vehicles in Mexico.

Metals Focus’ Director of PGM Research, Wilma Swarts, has indicated that PGM demand could fall by around 150,000 ounces this year. 

This decrease is contingent upon tariffs leading to a reduction in US vehicle sales of up to one million units, with 90% of that reduction impacting internal combustion engine and hybrid vehicles.

Spot platinum and spot palladium fell over 2% on February 19, the day after Trump announced his auto tariff plans.

They have since dropped approximately 5% and 7%, respectively.

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President Donald Trump’s meeting with Ukrainian President Volodymyr Zelenskyy on Friday quickly turned tense, as the two leaders clashed over the prospects of a US-brokered peace deal with Russia.

Zelenskyy cast doubt on the likelihood of a lasting agreement, prompting an angry response from Trump and Vice President JD Vance, who accused the Ukrainian leader of being ungrateful and obstructing negotiations.

“It’s going to be very hard to do business like this,” Trump told Zelenskyy, suggesting that Ukraine lacked leverage without US support.

“You’ve got to be more thankful, because let me tell you, you don’t have the cards. With us, you have the cards, but without us, you don’t have any cards.”

He went further, warning, “You’re gambling with World War III, and what you’re doing is very disrespectful to the country.”

Zelenskyy vs Trump and Vance at the Oval Office

The heated exchange came as both the leaders were meeting to sign an agreement allowing the US to unlock future revenue from Ukraine’s natural resources.

Trump had presented the deal as a major commitment to Kyiv, arguing that it would pave the way for peace.

However, it failed to offer the explicit security guarantees Zelenskyy had sought, focusing instead on economic collaboration.

Zelenskyy pushed back, insisting that Russian President Vladimir Putin had repeatedly violated past ceasefire agreements and that Ukraine could not settle for a simple ceasefire.

“Putin will never stop and will go further and further,” he warned, arguing that the Russian leader was determined to destroy Ukraine.

The conversation became even more contentious when Vance criticized Zelenskyy’s tone.

“Do you think that it’s respectful to come to the Oval Office of the United States of America and attack the administration that’s trying to prevent the destruction of your country?” the vice president asked.

Trump then accused Zelenskyy of harboring “tremendous hatred” for Putin, suggesting that his emotions were preventing a resolution.

Tensions escalated further when Zelenskyy suggested that Trump, protected by an ocean, did not fully grasp the immediate threat Ukraine faced.

Trump shot back, “You’re in no position to dictate what we’re going to feel. We’re going to feel very good and very strong. You’re right now not in a very good position right now.”

Vance then pressed Zelenskyy to acknowledge US support, pointedly asking, “Have you said thank you once?”

He also added: “Accept that there are disagreements, and let’s go litigate those disagreements rather than trying to fight it out in the American media when you’re wrong.”

Trump has portrayed the natural resources deal as a way to reimburse American taxpayers while strengthening economic ties with Ukraine. He has also continued to push for a ceasefire, arguing that economic incentives would be enough to deter Russian aggression.

“Once we make the agreement, that’s going to be 95% of it. It’s not going to go back to fighting,” Trump said, expressing confidence in his ability to negotiate with Putin.

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