Mumbai, August 3: Gold demand in India jumped by 37 to 167.4 tonnes during the second quarter of 2017, buoyed by seasonal demand and improved rural sentiment, the World Gold Council (WGC) said in a report.
The demand in the April-June last year stood at 122.1 tonnes, WGC said in its latest Gold Demand Trends report.
However, global gold demand declined by 10 per cent to 953 tonnes in the April-June quarter of 2017, due to significant slowdown in inflows into Exchange Traded Funds (ETFs), WGC said.
The overall gold demand in the corresponding quarter of 2016 stood at 1,055.6 tonnes. Investment demand fell 34 per cent to 297 tonnes as compared to 450 tonnes in the same period last year.
In India, the demand surged by 32 per cent at Rs 43,600 crore against Rs 33,090 crore in the Q2 2016. However, the second quarter demand is lower than the five-year average and is mainly driven by the anxiety on the Goods and Services Tax (GST) roll out, which led to advance purchase towards the end of quarter, WGC managing director, India, Somasundaram PR told PTI.
The second quarter of 2016, was partially affected by the jewellers strike against one per cent excise duty on jewellery, he said.
The total jewellery demand in India during Q2 this year was up 41 per cent at 126.7 tonnes as compared to 89.8 tonnes in the same period of last year, the report said.
In value, jewellery demand grew by 36 per cent at Rs 33,000 crore against Rs 24,350 crore in the corresponding quarter of 2016.
The total investment demand was up 26 per cent at 40.7 tonnes against 32.3 tonnes in Q2 2016.
Similarly, in value terms, gold investment demand was recorded at Rs 10,610 crore, up 21 per cent from Rs 8,740 crore in the corresponding period last year.
The total gold recycled in India in the April-June period increased at 29.6 tonnes against 23.8 tonnes in Q2 last year.
The report said after record levels of inflows into ETFs in the first half (H1) of 2016, a significant slowdown (globally) in the sector was the predominant factor behind the fall in overall demand so far this year.
During the second quarter, the central bank demand jumped by 20 per cent to 94 tonnes against 78 tonnes in the Q2 of 2016.
In the first half of 2017, central bank purchases were down by 3 per cent at 177 tonnes.
India’s gold demand in Q2 2017 was a robust quarter as seasonal demand and improved rural sentiment contributing to the year-on-year increase. Both jewellery and investment demand saw a healthy rise despite a low base of Q2 2016, Somasundaram said.
Global jewellery demand rose by 8 per cent to 481 tonnes, which was 447 tonnes in the same period last year, mainly driven by India.
“Demand for H1 2017 was down 14 per cent compared to last year, but in some respects the market was in better shape. Last year’s growth was solely down to record ETF inflows, while consumer demand slumped,” WGC Head of Market Intelligence Alistair Hewitt said. PTI
