India's gold demand for the April-June quarter of 2020 contracted to 63.7 tonnes, down 70% as compared to 213.2 tonnes in the same period last year. This is a 11-year low, World Good Council (WGC) said. The lowest demand in recent times was witnessed in the January to March quarter of 2009 at 64 tonnes.
India’s gold demand during the quarter was valued at Rs 26,600 crore, down by 57% as compared to Rs 62,420 crore in the same period last year, WGC data showed.
Also read: India gold prices hit all-time high, dampens retail demand
Total jewellery demand in India decreased by 74% to 44 tonnes as compared to 168.6 tonnes in the April-June quarter of 2019. The value of jewellery demand was Rs 18,350 crore, down by 63% from Rs. 49,380 crore in the same period last year.
Total investment demand for the quarter at 19.8 tonnes was down by 56% in comparison to 44.5 tonnes in the same period last year.
In value terms, gold investment demand was Rs. 8,250 crores, down by 37%. Total gold recycled was 13.8 tonnes, down by 64% YoY. Total gold imports during the quarter was 11.6 tonnes, down by 95% compared to 247.4 tonnes YoY.
Also read: Gold investment rises as jewellery demand falters
Addressing a video conference Somasundaram PR, Managing Director, India, World Gold Council said, “The quarter was defined by lockdowns and high prices, both of which acted in combination to keep India’s gold demand record low at 63.7 tonnes, down 70%.”
“Sales trend during the window of opportunity afforded by relaxation of lockdown in select cities, do point to healthy latent demand that should surface once Covid turbulence is behind us,” he added.
Demand for jewellery dropped by 74% to 44 tonnes, in an atmosphere of fear and uncertainty where weddings were postponed or just turned out to be uncharacteristically quiet and private, he added.
Investment demand fared relatively better, with demand drop lower at 56% to 19.8 tonnes - as gold’s safe haven attributes and perhaps some price increase anticipation attracted HNIs and investors.
He said with gold price currently a life-time high of over Rs 50,000/10gms, the demand trend in the future remains uncertain but the July to September quarter will be better than the previous quarter which was mostly a washout due to the lockdown.
“To put it in perspective, gold prices have risen by 60% since January 2019 and 20% since January 2020; income growth or expectation have not kept pace with this,” he said.
“As we are still in the midst of the crisis without clear sight of many variables on consumer behaviour, prices or length of the disruption, we will not be able to quantify the impact on the full year gold demand in India,” he added.
11% drop in global demand
Global gold demand declined by 11 per cent during April-June to 1,015.7 tonne, but the demand for the yellow metal as an investment category witnessed a significant surge during the period, says a report.
According to a World Gold Council (WGC) report, the overall gold during April-June period fell to 1,015.7 tonne, from 1,136.9 tonne a year ago, due to lockdown in many countries to curb the spread of COVID-19 pandemic.
World Gold Council’s “Q2 Gold Demand Trends” report noted that while the COVID-19 pandemic severely curtailed consumer demand, it provided support for investment.
The total investment demand increased significantly by 98 per cent to 582.9 tonne during the quarter, compared to 295 tonne in the same quarter of 2019.
Global jewellery demand dropped to a record low for the second consecutive quarter, declining by 53 per cent during the quarter under review to 251.5 tonne compared to 529.6 tonne in the same period last year.
Gold demand in technology also witnessed a drop of 18 per cent to 66.6 tonne during April-June, compared to 80.7 tonne in the same period last year.
Similarly, Central Banks net purchases declined by 50 per cent year-on-year to 114.7 tonne during Q2 of 2020, compared with 231.7 tonne during April-June last year.
(With inputs from PTI)
