New Delhi, November 5: Demand for gold in India for Q3 (July-September) 2019 was at 123.9 tonnes down by 32 per cent as compared to overall Q3 demand for 2018 at 183.2 tonnes, a data by World Gold Council stated on Tuesday.
New Delhi, November 5: Demand for gold in India for Q3 (July-September) 2019 was at 123.9 tonnes down by 32 per cent as compared to overall Q3 demand for 2018 at 183.2 tonnes, a data by World Gold Council stated on Tuesday.
The sharp fall in the demand is attributed to the high prices of the yellow metal.
India’s Q3 2019 gold demand value was Rs 41,297 crore, down by 18 per cent as compared to Q3 2018 at Rs 50,085 Crore.
“Gold demand in India declined by 32 per cent to 123.9 tonnes in Q3, due to weak consumer sentiment and high prices. Despite a step-up in buying during Akshaya Tritiya in Q2; monsoons, the absence of any major festivals and intervening inauspicious periods like Pitru-Paksh, muted demand in Q3. And the drop this year has been significant, making it one of the lowest third quarters since 2005,” said Somasundaram PR, MD, India, World Gold Council.
Global gold demand grew modestly to 1,107.9 tonne in the third quarter of 2019, a rise of 3 per cent on the same period last year, according to the World Gold Council’s latest Gold Demand Trends report.
Total jewellery demand in India for Q3 2019 decreased by 32 per cent at 101.6 tonnes as compared to Q3 2018 at 148.8 tonnes. The value of jewellery demand was Rs 33,851 Crore, down by 17 per cent from Q3 2018 at Rs 40,687 Crore.
“While wedding-related purchases provided some support during the quarter, overall jewellery demand fell by 32 per cent to 101.6t and bars and coins by 35 per cent. This was due to low levels of general consumer confidence following a lot of noise about an economic slowdown and a lack of appreciation of the secular nature of price movements. The increase in custom duty in the July budget from 10 per cent to 12.5 per cent, also did not help,” said Somasundaram.
The value of jewellery demand was Rs 33,851 crore, down by 17 per cent from Q3 2018 at Rs 40,687 crore.
Total investment demand for Q3 2019 at 22.3 tonne was down by 35 per cent in comparison to Q3 2018 at 34.4 tonnes.
“The sharp rise in the gold price and deep discount in the cash bullion market impacted both trade and the consumer outlook in Q3. The gold price rally failed to lose momentum during the quarter, breaching the Rs 35,000/10g level in mid-July and continued to climb to Rs 38,795/10g by the end 75 of August. This ~Rs 5,000/10g leap in two months caught consumers completely off-guard, prompting many to delay buying and the domestic gold price reached an all-time historic high of Rs 39,011/10g in the first week of September. The following softening of prices in the final few weeks of the quarter – due to the decrease in the international gold price and a strengthening rupee – actually led to expectations of a further drop and hence, did not aid demand,” Somasundaram added.
World Gold Council’s 2019 full year market expectations of gold demand in India is between 700 – 750 tonnes.