Gold enters ‘healthy consolidation phase’ after retail buying surge: Report

Gold has entered a phase of consolidation after a strong rally driven by retail demand across key markets, global investment firm Jefferies said in its latest report.The firm noted that the surge in buying seen late last year and early this year—particularly in India, China and the United States—has begun to moderate, signalling a stabilisation in prices.

“Gold has entered a healthy consolidation period after the retail-driven buying frenzy late last year and early this year,” the report said, as quoted by news agency ANI.

Demand cools after strong rally

Highlighting India as an example, Jefferies said gold imports dropped sharply after a peak phase. Imports stood at $14.7 billion in October and $12.1 billion in January, before falling to $3.1 billion in March, reflecting a slowdown in buying momentum.The report described this phase as a natural adjustment following the earlier surge, with the market now stabilising after heightened retail activity. Gold is currently trading around $4,804 per ounce, below its peak of $5,595 per ounce recorded in late January.

Mining sector shows strong fundamentals

Despite the moderation in demand, Jefferies highlighted strong underlying fundamentals in the gold mining sector. Companies are focusing on shareholder returns through dividends and buybacks rather than aggressive expansion, marking a shift from the 2011 bull cycle, when capital allocation missteps led to losses.

The sector has seen ten consecutive quarters of strong average gold prices, with many firms operating debt-free. The North American gold mining industry is expected to generate about $36 billion in free cash flow this year, according to the report.Jefferies said it will maintain exposure to gold mining stocks, allocating 10% in global portfolios and 11% in Asia ex-Japan portfolios, and may increase exposure if prices fall toward the $3,800–$4,000 per ounce range.Overall, the report suggests that while gold prices are consolidating, the sector remains supported by disciplined capital management and robust cash flows.