INDIA'S gold demand rose five per cent to 159 tonne during January-March period this year on fall in prices that boosted jewellery sales during wedding season, a World Gold Council (WGC) report showed today (2).
Gold demand stood at 151.5 tonne in the first quarter of 2018, according to WGC's ‘Q1 Gold Demand Trends' report.
In terms of value, there was a 13 per cent growth during the quarter at £5.18 billion compared to £4.59bn in the same period last year.
WGC India managing director Somasundaram PR said: "The strengthening of the rupee and the fall in local gold prices towards the later part of the quarter triggered a rise in Q1 gold demand to 159 tonne. Growth of 5 per cent in Indian jewellery demand to 125.4 tonne uplifted global demand and boosted retail sentiment.
"The increase in auspicious wedding days during the quarter to 21 days from 8 in the same period of 2018 also played a crucial role in increase in demand."
Gold prices dropped to Rs 32,000 per 10 grams by the first week of March, he added.
Also, he noted, there was a jump in volume following stringent checking during the ongoing elections controlled the grey market, which benefitted the organised retail industry.
"Smuggling has come down, however structurally nothing has changed. Unless some policy decision is taken like reducing the Customs Duty to a reasonable level the grey market will bounce back after the elections," he said.
Total jewellery demand in the first quarter was up by five per cent at 125.4 tonne compared to 119.2 tonne in the corresponding period of 2018.
In value, jewellery demand grew by 13 per cent to £4.08bn against £3.61bn in the same quarter of 2018.
Total Investment demand for first quarter of 2019 was up by four per cent at 33.6 tonne from 32.3 tonne in the same period of 2018.
In value terms, gold investment demand went up by 12 per cent to £1.09bn from £979.17 million in first quarter of 2018.
The stronger rupee benefited investors, with demand for gold bars and coins in the first quarter, Somasundaram said.
Total gold recycled in the country also grew by 14 per cent in the first quarter of 2019 to 16.1 tonne compared to 14.1 tonne in the first quarter of 2018.
Going forward, Somasundaram said, demand is likely to be boosted in second quarter due to traditional wedding season buying, the Akshaya Tritiya festival and rising crop prices.
"In addition, the India Meteorological Department (IMD) forecast of normal monsoon this year which augurs well for the rural economy and gold. The gold prices is also expected to remain attractive to boost consumer sentiment," he said.
Talking about import, Somasundaram said, the shipments into the country grew by 11 per cent to 175 tonne compared to 157 tonne in the same period of 2018.
"Demand is likely to be more in the higher end of 750 to 850 tonne in 2019. But it may not be driven by imports. Further manufacturing will be way ahead of demand," he added.
(PTI)
Police may probe anti-Israel comments at Glastonbury