India’s gold demand was up 10% at 183.2 tonnes in the third quarter of 2018 compared to the corresponding quarter of 2017 as a dip in the price in the early part of the quarter — the lowest level since January 2018 — spurred demand, according to a report by the World Gold Council (WGC).
Further, while the jewellery demand was up 10%, the investment demand for coins and bars increased by 11% compared to the third quarter of last year.
The July to September period saw jewellery demand pegged at 148.8 tonnes while coins and bars saw a collective demand of 34.4 tonnes.
Incidentally, the growth in demand needs to be seen in the context of a low base following the introduction of Goods and Services Tax (GST) in the third quarter of 2017.
Further, the rise has been after two consecutive quarters of decline.
In value terms, the third quarter saw gold worth ₹50,090 crore being bought by Indian consumers, with jewellery and investment segments accounting for ₹40,690 crore and ₹9,400 crore, respectively.
Demand hit
According to Somasundaram P.R., managing director, India, World Gold Council, while a dip in the gold price in the early part of the quarter lifted demand, factors such as rupee depreciation and floods in Kerala affected the demand negatively.
“A combination of factors such as lack of buying occasions, disruption caused due to floods in a key gold market and an intervening inauspicious period affected demand,” Mr. Somasundaram added.
The World Gold Council expects the total gold demand for 2018 to be at the lower end of 700-800 tonnes range due to factors like lack of liquidity, rising prices and impending elections in some key states that could impact trade logistics.
