Q1 gold demand remains resilient despite high prices
Thu July 11 2024
Demand for gold in Gujarat has remained strong even as prices reached unprecedented levels. In May, the cost of gold in the Ahmedabad market soared to Rs 77,000 per 10g. Yet, consumer appetite for gold continued robustly throughout the first quarter of the ongoing financial year 2024-25.
According to Ahmedabad Air Cargo Complex (AACC) data, the state imported 19.19 metric tonnes (MT) of gold from April to June 2024. This represents a significant 22% increase in imports of the yellow metal as compared to the 15.71 MT procured during the same period in 2023.
On Wednesday, gold prices in the domestic market slightly dipped to Rs 75,300 per 10g, reflecting the volatility of the precious metal’s prices. Investors played a crucial role in maintaining the demand for gold. “Many turned to pure gold coins and bars as a safe investment option amid economic uncertainties. The preference for physical gold as a reliable store of value has added to the overall demand, highlighting gold’s dual role as adornment and investment,” said Haresh Acharya, director of India Bullion and Jewellers’ Association (IBJA).
“Skyrocketing gold prices have been driven by central banks buying record quantities of gold and investors increasing their asset allocations into the precious metal. Investment in gold bars and coins have become particularly popular among consumers, including that in Gujarat,” he further added.
Nevertheless, the high prices have not deterred buyers, with various factors driving the sustained demand. One of the primary contributors to this steady demand is the cultural and traditional significance of gold in Gujarat, especially during auspicious occasions. “Summer weddings and the Akshaya Tritiya festival have significantly bolstered gold sales. Bullion demand remained good. The auspicious muhurat of Akshaya Tritiya saw the trading of approximately 150kg of gold in a single day in Gujarat,” said Manoj Soni, a jeweller from Ahmedabad.
Additionally, the trend towards lighter and contemporary gold jewellery designs has pushed the demand for the yellow metal, providing some relief to jewellers during non-peak season. The market saw a clear preference for 16- and 18-carat gold jewellery, with some buyers even opting for 22-carat pieces, despite the high prices, claim jewellers. This shift towards more affordable yet elegant designs has helped sustain consumer interest in precious metal jewellery.
Source: https://timesofindia.indiatimes.com/