The Hindu : Business : India remains top gold consumer

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Thursday, Nov 20, 2008
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Business

India remains top gold consumer

Special Correspondent

MUMBAI: India maintained its reputation of being the numero uno consumer of gold when demand for gold reached an all time quarterly record of Rs. 30,600 crore in the third quarter of 2008 (July-September), a significant 66 per cent increase over the third quarter of 2007 as investors sought a safe haven and jewellery buyers returned to the market to take advantage of softer gold prices. Demand increased to 250 tonnes in the third quarter from 190 tonnes in the same quarter in 2007, a 31 per cent increase.

Demand

According to Gold Demand Trends, a report released out by the World Gold Council (WGC), the demand for gold jewellery in India reached 178 tonnes, a rise of 29 per cent in tonnage terms over the same period in 2007, despite a deteriorating economic situation creating a greater squeeze on consumer spending. In currency terms, this equated to a rise of 78 per cent, from Rs. 12,300 crore to Rs. 21,900 crore.

After a sluggish start to the quarter, gold jewellery demand surged driven by rural economic boom, urban consumers wanting to safeguard their investments, said the report. Much of India experienced a good monsoon rainfall, which resulted in a ‘feel good’ factor boosting rural spending on gold during the festive season. The data, compiled independently for WGC by GFMS Limited, shows investment demand for gold was similarly boosted by the pullback in the gold price during the third quarter.

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