India's gold demand dips 5% to 149.7 tonnes in June quarter on high prices: WGC
India's
Prices during the April-June quarter soared, with the cost of 24-carat gold
crossing Rs 74,000 per 10 grams. Â The average price of gold during the
April-June period in US dollar terms was USD 2,338.2, compared to USD 1,975.9
in the same period of 2023. The average quarterly price in rupee terms was Rs
62,700.5, compared to Rs 52,191.6 in the same period last year (excluding
import duty and GST), WGC said.
"India's gold demand softened slightly in the second quarter of 2024,
reaching 149.7 tonnes, down 5 per cent year-on-year. This can be attributed to
record-high gold prices impacting affordability and causing a slowdown in
consumer purchases. However, the overall value of demand remained strong,
increasing by 14 per cent, highlighting gold's enduring value for Indian
consumers," said Sachin Jain, WGC Regional CEO, India.
Further, the report said the total
Total gold imports in India during the April-June quarter were 196.9 tonnes,
which is 8 per cent more compared to 182.3 tonnes in the same period of last
year. Â Jain said jewellery demand felt the pressure of high prices, declining
17 per cent to 107 tonnes due to high local prices, the general election and a
severe heatwave.
"While festivals like Akshaya Tritiya and Gudi Padwa provided a temporary
boost, record high prices continued to dampen consumer sentiment," he
added. Â However, he said, investment demand surged 46 per cent to 43.1 tonnes,
its highest second-quarter level since 2014 driven by expectations of further
price appreciation and safe-haven buying. Bucking global trends, India's gold
recycling fell 39 per cent to 23 tonnes, as consumers opted to exchange old
jewellery for new rather than cashing in. This indicates limited distress
selling and highlights gold's enduring role as a store of value in India, he
noted.
"Looking ahead, the recent 9 per cent reduction in import duty on gold is
expected to revive the gold demand in the July quarter ahead of the main
festive season that begins from September, which could be further boosted by a
healthy monsoon. India's economic outlook too remains positive, with strong GDP
forecasts and rural sector recovery are all likely to support demand in the
second half of the year. Our forecast for full-year demand is between 700 to
750 tonnes," Jain added.
Source: https://www.businessinsider.in/