Mumbai: Of India gold demand After a 18% drop in the first quarter, the second quarter is likely to remain soft as retail purchases during a major festival early next month could be below normal due to volatile prices. world gold council (WGC) said on Thursday.
The world’s second biggest buy less Sleep Consumers can weigh in on prices, which are trading near their lowest levels in two months.
But falling demand for gold imports may help narrow India’s trade deficit and support the rupee.
Somasundaram PR, regional chief executive officer of WGC’s India operations, told Reuters: “Demand could be lower during Akshaya Tritiya.”
It is considered auspicious to buy gold in the holy festival of Akshaya Tritiya, which is celebrated at the beginning of the next week.
India’s demand for gold fell 18% from a year ago to 135.5 tonnes in the first quarter, WGC said in a report, as jewelery consumption fell 26% from a year ago due to higher prices and fewer weddings .
Somasundaram said, “Consumers are linking the high prices to the Ukraine war and are expecting that they will come down after the war is over. This is forcing them to postpone buying. This will continue in this quarter.”
Local gold prices The year started at Rs 48,050 per 10 grams, but rose to Rs 55,558 per 10 grams in March after Russia invaded Ukraine.
Somasundaram said higher prices increased the availability of old jewelery and coins by 88% to 27.8 tonnes from a year ago.
The WGC had earlier projected India’s gold consumption to be 800-850 tonnes in 2022, but a moderation in demand in the first quarter prompted the forecast to be lowered to 800 tonnes.
The demand for coins and bars, known as investment demand, rose 5% to 41.3 tonnes in the March quarter, as rising prices and volatility in equity markets attracted investors, the WGC said.
Somasundaram said consumers want to buy gold but due to high prices and rising inflation, buying is being limited.
“Inflation is really bad because disposable income is coming down. The reason for holding gold will be more but the buying power will be less,” he said.
The world’s second biggest buy less Sleep Consumers can weigh in on prices, which are trading near their lowest levels in two months.
But falling demand for gold imports may help narrow India’s trade deficit and support the rupee.
Somasundaram PR, regional chief executive officer of WGC’s India operations, told Reuters: “Demand could be lower during Akshaya Tritiya.”
It is considered auspicious to buy gold in the holy festival of Akshaya Tritiya, which is celebrated at the beginning of the next week.
India’s demand for gold fell 18% from a year ago to 135.5 tonnes in the first quarter, WGC said in a report, as jewelery consumption fell 26% from a year ago due to higher prices and fewer weddings .
Somasundaram said, “Consumers are linking the high prices to the Ukraine war and are expecting that they will come down after the war is over. This is forcing them to postpone buying. This will continue in this quarter.”
Local gold prices The year started at Rs 48,050 per 10 grams, but rose to Rs 55,558 per 10 grams in March after Russia invaded Ukraine.
Somasundaram said higher prices increased the availability of old jewelery and coins by 88% to 27.8 tonnes from a year ago.
The WGC had earlier projected India’s gold consumption to be 800-850 tonnes in 2022, but a moderation in demand in the first quarter prompted the forecast to be lowered to 800 tonnes.
The demand for coins and bars, known as investment demand, rose 5% to 41.3 tonnes in the March quarter, as rising prices and volatility in equity markets attracted investors, the WGC said.
Somasundaram said consumers want to buy gold but due to high prices and rising inflation, buying is being limited.
“Inflation is really bad because disposable income is coming down. The reason for holding gold will be more but the buying power will be less,” he said.