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Updated: October 8, 2013 21:42 IST

Gold demand to be robust in Q4: World Gold Council

Special Correspondent
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P. R. Somasundaram
P. R. Somasundaram

The World Gold Council (WGC) expects gold demand in India to pick up smartly in the fourth quarter of the calendar 2013 after a lacklustre third quarter of 2013.

Gold demand in India is expected to grow about 15 per cent over the same period in the fourth quarter last year to around 300 tonnes. “The fourth quarter is the harvesting season and the monsoon has been good this year. Besides, there was a lot of pent-up demand in the last quarter,” Somasundaram P. R., Managing Director, WGC India, said while addressing a press conference here on Tuesday. “There are 20 per cent more auspicious days during the period, price of gold is more reasonable and jewellery retailers are expanding all over the country. We expect gold demand to be robust in the fourth quarter”.

Mr. Somasundaram said gold imports had recommenced after a lull of almost two months. WGC estimates that Indian gold imports during the July-September 2013 period to be less than 100 tonnes with restrictions that were in place by the Reserve Bank of India (RBI). Gold demand in the first-half of the calendar was at 567 tonnes.

“The third quarter was very difficult and the July-August period is anyway considered off-season”.

The government is comfortable with gold imports at 850 tonnes per annum and Mr. Somasundaram said, “We believe that the government is not anti-gold but wants to moderate demand for gold. The problem in April-May 2013 was that people went berserk as gold prices reacted from Rs.32,000 per 10 gram to Rs.25,000 levels and rushed to buy”.

WGC expects gold demand to remain at 900-1000 tonnes for the calendar. “This is not a major misalignment as the government had said to moderate gold imports in the April-May period when it went to 300 tonnes and then reacted in the July-September period,’’ the WGC India chief said.

Mr. Somasundaram released a study by PricewaterhouseCoopers for WGC, ‘The direct economic impact of gold’ which takes into account the entire value chain from large scale mining supply to consumer demand. “In theory, gold always does well in a crisis but we will have to wait and see how specifically the U.S. shutdown affects gold”.

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