WGC raises India's gold consumption projection to 850 tonnes in 2024
Thu Aug 29 2024
The World Gold Council (WGC) has raised its projection for India's gold consumption in 2024 to 850 tonnes from 750 tonnes. A good monsoon coupled with a duty cut on gold will drive the demand, said John Reade, market strategist-Europe and Asia, World Gold Council.
"Jewellery will drive this higher demand of gold in India this year," Reade said. In the July-September quarter, gold demand in India is expected to be 230 tonnes, up 10% year-on-year, he said.
The trend is expected to continue in the fourth quarter as well, during the Diwali-Dhanteras period, he said. Gold demand in the April-June quarter fell 5% year-on-year to 158.1 tonnes owing to high import duty, as per WGC.
With the government reducing the importing duty on gold to 6% from 15% in the Union budget on July 23, demand saw a quick uptick.
"There are clear signs of gold becoming a financial instrument in India," Reade said, referring to the growth of gold exchange traded funds (ETFs) in India. "In recent times, investment in gold exchange-traded funds has shown an uptick. While till date only 50 tonnes of gold are held through gold ETFs in India, it is expected to witness an upsurge in coming years."
However, he cautioned that there could be a major swing in prices in the first week of November, when the US elects its new President.
India depends entirely on imports for its gold consumption and any change in international prices impacts the landed price of gold.
Source: https://economictimes.indiatimes.com/