Investment in bars, coins will drive gold sales in India, says WGC India
Sat June 08 2024
Economic progress has been the key factor to drive gold consumption in India. However, compared to jewellery, demand for gold bars and coins, as part of investment plan, is shining brighter, and this demand will continue
to grow steadily, says World Gold Council-India. The World Gold Council (WGC) in its latest global report ‘Gold Demand Trends Q1 2024’, had stated that India’s total gold demand, including both jewellery and investment,
increased to 136.6 tonne in January – March quarter, from 126.3 tonne in the same quarter of previous fiscal.
“The first quarter has been a successful quarter which is the result of few
factors, the most important driver being the current economic progress that is
happening in India. We have seen historically that whenever one per
cent of income goes into the hands of people the demand of gold also goes up,” Sachin Jain, Regional CEO, World Gold Council-India told Bizz Buzz, when asked about the drivers for demand of gold amidst steep gold
price.
Jain, went on to add that, in the investment side, with bars and coins, a 19
per cent increase in volume, and 33 per cent increase in value, is being
witnessed. “This area we foresee growing steadily for India. In Q1 2024,
and a continuing trend, is the growth of jewellery consumption by six to eight per cent in volume, which means 16 per cent in value, because of the price of the yellow metal.”
He further informed that government buying gold has also steadily gone up. Last
year, RBI bought 16 tonne of gold, whereas in first quarter it has already
bought 19 tonne, and they are going to continue to buy heavily
this year, Jain added. When asked about higher import duties on gold resulting in malpractice such as smuggling of the yellow metal, Jain said that it is a significant decision for the Government of India to take into
consideration. “If the import duties are as high as it is currently, it increases the malpractice that is happening on-ground. However, the Centre will perceive it from a long-term perspective. If the consumption has not gone
down, I do not see why the government would change the duty structure. WGC can only speak about the parity Indian industry should have in the world. While looking at different import structures across the incentivizing
practice, there is 15 to 18 per cent difference with neighbouring countries.” WGC India is in the process of forming the first self regulatory organisation of India for businesses. To bring in reforms, fair practices in the
concerned industry, WGC India will be launching the self regulatory body in August 2024. Jain said that further details about the functions of the body will be revealed in the coming months.
Source: https://www.bizzbuzz.news/