Continuing restrictions on gold imports into India have led the World Gold Council (WGC) to re-calibrate its projected demand for the year 2014 to 850-950 tonnes from the earlier 900-1,000 tonnes.
In its report ‘India demand statistics’ for the April-June 2014 quarter, WGC, on Thursday, announced that India’s demand for gold was down 39 per cent at 204.1 tonnes and in value terms, it had come down by 41 per cent to Rs.50,564.3 crore.
Of this, WGC said, jewellery demand was down 18 per cent at 154.5 tonnes while in value terms, it was down 20 per cent at Rs.38,269.5 crore. Investment demand was down a significant 67 per cent in volume and value terms at 49.6 tonnes and Rs.12,294.8 crore.
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Recycled gold in India during the quarter was up at 16.4 tonnes (9.5 tonnes).
Somasundaram P. R., Managing Director, India, WGC, said, “Restrictions played a part in the drop in demand but there are also expectations of a price drop. Inflation cut into the wallet of the buyer and savings were lower. Besides, it comes against a backdrop of huge jump in demand in 2013.”
For the first-half of calendar 2014, Indian gold demand was lower by 34 per cent in volume terms at 394.4 tonnes and 37 per cent in value terms at Rs.99,417.3 crore. Further, Mr. Somasundaram said the huge negative sentiment which was there in the second-half of 2013, when restrictions were imposed, had been overcome.
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Considering that the policy squeeze and other economic factors had affected savings in general in the first-half, for the second-half, monsoon looked near normal and there was a general positive sentiment in the economy, he said.
“With the impending wedding season and favourable monsoons, it is likely that the demand in the second-half of the year will be near normal. We, therefore, expect annual demand to be in the region of 850-900 tonnes with over 200 tonnes flowing through the grey market,” he said.