Mumbai: India’s gold demand declined by 8 per cent at 187.2 tonnes during April-June period compared to second quarter of last year driven by to high local prices and seasonal factors, World Gold Council (WGC) said in a report.
The total gold demand stood at 202.6 tonnes in the second quarter of 2017, WGC said in its Gold Demand Trends Q2 2018 report.
In value terms, gold demand was Rs 52,692 crore, almost same as the second quarter of 2017 at Rs 52,750 crore.
Total jewellery demand also dropped by 8 per cent during the quarter 147.9 tonnes compared to 161 tonnes in the same period last year.
While in value terms, jewellery demand was down by 1 per cent at Rs 41,631 crore against Rs 41,925 crore in the same period last year.
Total investment demand was down by 5 per cent at 39.3 tonnes compared with 41.6 tonnes in the same period in 2017.
In value terms, however, gold investment demand was Rs 11,061 crore, up by 2 per per cent from Rs 10,825 crore in the same period last year.
Meanwhile, the report said, the total gold recycled in India during the second quarter was of 2018 was 32 tonnes, up by 8 per cent compared to 29.6 tonnes in the same period last year.
India’s gold demand in Q2 2018 was 8 per cent lower than the strong Q2 in 2017, when consumers rushed to make advance purchases ahead of the goods and services tax (GST) roll out,” WGC Managing Director, India, Somasundaram PR told PTI here.
“A strong Akshaya Tritiya and wedding season boosted demand at the start of the quarter but the onset of Adhik Maas’, which is considered inauspicious, and a rising price inspite of softening international prices kept the quarter range bound, Somasundaram added.
While demand for the first half of the year is also below the same period in 2017 and the 10-year average by 6 per cent and 13 per cent, respectively, there are strong positives evident in the growth of organised trade and digital products, he added.
The short-term disruption caused by the various transparency measures since 2016 have started to wane with industry transitioning well across the spectrum.
“For the second half, good monsoon and the festive season, aided by the government’s effort to boost farm incomes, bodes well for demand. Our full year estimate for gold demand is in the range of 700 to 800 tonnes, mostly at the lower end of the range, he added.
Going forward, he said, the third quarter is usually the off season and the last quarter is generally the strong one with Diwali and marriage season, but the demand will depend on gold price behaviour, currency movement and the government policies and how they translates.
Talking about imports, Somasundaram said, the gold shipments into India declined by 38 per cent during the quarter two to 170 tonnes from 274 tonnes in the same period of 2017. In the first six months of this year, imports declined by 13.51 per cent at 480 tonnes from 555 tonnes in the same period of 2017.
All aspects of supply chain is bound by policy framework, which will make it difficult for the grey market to exist. The jewellery market is consolidating with unorganised players partnering with organised ones. The market is slowly adjusting with the new framework, which is positive for the industry in the long run, he added.
