Gold demand in minimum of 8 years in October-December: WGC
CHENNAI: High gold prices during the quarter from October to December 2019 brought gold to a minimum of 8 years, when consumption was 194.3 tons, according to data from World Gold Council He showed.
Traditionally, a period of high demand, the quarter that saw Diwali and the beginning of the wedding season, witnessed the loss of gold glitter due to 20% higher prices compared to the previous year.
The demand for jewelry stood at 149 tons, 17% less than 180 tons and the demand for investment fell by 20%. The data from the council showed that the demand for gold for the 2019 calendar year also fell by 9% in volume, due to a moderate demand in the second half of the year.
“By volume, India's annual gold demand was 690 tons, lower than our 700-800 tons perspective, mainly due to a sharp price increase of more than 20% in H2. The growth in H1 was followed by a sharp drop in Q3. Diwali and revived hopes, but volatility along with a higher price bar impacted demand, in lower and middle price bands, said PR Somadundaram, managing director of the Council of India.
Jewelers witnessed a drop in demand of up to 30% on average in the fourth quarter and restricted themselves to purchases necessary for weddings and other occasions.
Demand in the first half was good and since June, when prices began to skyrocket, it fell and, on average, in the second half, we saw a fall in demand from 25% to 30%, said MD, NAC Jewelers and president of the national council of All India Gems and Jewelers.
Looking to the future, jewelers expect the next budget to reduce gold import tariffs from the current 12.5% to at least 10%, which in turn would help save the demand situation.
As political measures develop, broader economic growth accelerates and local prices for the past 6 months become more acceptable among households, India's demand for gold will be in the range of 700-800 tons in 2020, said Somasundaram.