Gold demand in the September quarter was down 16 per cent to 209 tonnes against 248 tonnes logged in the same period last year, due to a sharp rise in prices.

Jewellery demand dipped 31 per cent to 118 tonnes (172 tonnes) in the quarter under review, while that of investments increased to 20 per cent to 92 tonnes (77 tonnes), according to the World Gold Council data released on Thursday.

In value terms, demand was up 23 per cent to ₹2.03 lakh crore (₹1.65 lakh crore), even as jewellery demand was almost stagnant at ₹1.14 lakh crore, as volumes plunged. However, investments demand increased 74 per cent to ₹88,970 crore (₹51,080 crore).

Gold prices, excluding import duty and GST, increased sharply by 46 per cent to ₹97,075 per 10 grams in the September quarter, against ₹66,614 recorded in the same period last year, depressing consumer sentiment for most of the quarter.

In dollar terms, gold prices were up 40 per cent at $3,456 ($2,474) an ounce, leading to imports declining 34 per cent to 195 tonnes (308 tonnes).

WGC says resilience intact
Sachin Jain, Regional CEO, India, World Gold Council, told businessline that jewellery demand will bounce back in the December quarter on back of firm start during Dhanteras and Diwali season when footfalls went up 10-15 per cent.

Interestingly, the demand for high value gold jewellery are buoyant even while mid-sized jewellery purchases are catching up with huge pent-up demand, he said.

While WGC keeps away from predicting gold prices, he said all the pillar that aid in determining prices are very strong given global uncertainty, high demand from hedge funds and continued central bank buying, he added.

The depreciation of rupee against dollar has been a dampener pushed up prices in domestic currency terms and in a way boosted exchange of old gold jewellery for new by 40-45 per cent against 25 per cent last year. However, recycling of gold jewellery to cash has come down drastically reiterating consumer confidence in the yellow metal, he said.

Jain does not see a shortage of gold availability in the domestic market though there could be premium on gold depending on sudden spike in domestic demand.

With total gold demand from January to September at about 462 tonnes, WGC expects full-year demand between 600 and 700 tonnes, more towards higher end of range, said Jain.

Global demand glitters despite India, China slowdown

Gold demand in China was down 4 per cent in the September quarter to 167 (173) tonne, well below India’s, while jewellery demand slipped 17 per cent to 90 (109) tonne.

Globally, gold demand rose 3 per cent to 1,313 tonnes, though in value terms it increased 44 per cent to a record $146 billion, driven by inflows into exchange-traded funds.

Huge ETF buying of over 222 tonnes and robust bar and coin demand of 316 tonnes fuelled the rise in overall demand.

Central bank buying rose 10 per cent to 220 (199) tonnes, with the National Bank of Kazakhstan and the Central Bank of Brazil as the largest buyers.

Courtesy : The Hindu Business Line