Indian gold demand is likely to recover in the second half of 2021 from 35% below the pre-pandemic five-year average in the first half, as festivals and weddings are likely to boost retail purchases in the fourth quarter, the World Gold Council (WGC) said on Thursday.
Higher demand from the world’s second-biggest gold consumer could support global prices that have corrected almost 4% so far in 2021, although a rise in imports of the precious metal would widen India’s trade deficit and weigh on the rupee.
“Consumer demand is trying to make a recovery. It will spike once normalcy is restored on the COVID-19 front,” P.R. Somasundaram, regional CEO of WGC’s Indian operations, told Reuters.
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Demand for gold during the April-June quarter rose 19.2% in India to 76.1 tonne, according to the council’s estimates.
In value terms, demand increased 23% to ₹32,810 crore while total jewellery demand increased 25% to 55.1 tonne. In value terms, total demand for jewellery rose 29% to ₹23,750 crore. (With inputs from Lalatendu Mishra in Mumbai)