India’s gold demand falls 9 pc on record prices in 2019: WGC

PTI, Jan 30, 2020, 12:21 PM IST

New Delhi: India’s gold demand fell nine percent to 690.4 tonnes in 2019 from the previous calendar year as record domestic prices and economic slowdown dented retail purchase, the World Gold Council (WGC) said on Thursday.

However, in 2020, gold demand in India the world’s second-biggest consumer after China could increase to 700-800 tonnes on hopes of increased acceptance of high price level and likely economic reforms boosting consumer confidence.

“The domestic gold price finished 2019 just above Rs 39,000 per ten grams, almost 24 percent higher than at the end of 2018,” WGC said in its latest report.

“As policy measures unfold, broader economic growth accelerates and local prices of the past six months become more acceptable among households, India’s gold demand will be in the range of 700-800 tonnes in 2020,” Somasundaram PR, Managing Director of WGC’s India operations, told PTI.

“The WGC expects policy-led and industry-led initiatives to bring a marked shift in making the industry more transparent and organized this year,” he said.

“Already, the government has made hallmarking (quality certification) mandatory on January 15, 2020, with a transition period of one year for the trade to sell or change its existing non-hallmarked inventory. This is an overdue reform and a positive step towards making the Indian gold more trustworthy,” he added.

“These and other changes to follow are significantly positive for the long-term sustainability of demand, especially for the compliant and the organized sector,” Somasundaram said.

“However, short-term challenges remain as large sections of the industry compete on low margins and fear tax uncertainty, leaving little incentive for long term investments and modern trade practices,” Somasundaram said.

“India’s average long-term gold demand is likely around 850 tonnes given its affinity to gold and economic and social context,” he added.

In 2019, the WGC said India’s gold demand in volume terms declined to 690.4 tonnes from 760.4 tonnes in 2018, out of which jewelry demand fell nine percent to 544.6 tonnes from 598 tonnes, while bar and coins demand also dropped 10 percent to 145.8 tonnes from 162.4 tonnes in the said period.

However, in value terms, the country’s gold demand rose three percent to Rs 2,17,770 crore in 2019 from Rs 2,11,860 crore in the previous year.

“Dhanteras the first day of Diwali (the Festival of Light) which fell on October 25, 2019, failed to bring cheer to gold demand in Q4 as the higher domestic gold price and weak economic sentiment curtailed gold sales,” the WGC said.

Festival demand received some support from advance wedding purchases and a dip in the gold price ahead of the November wedding season released some pent-up wedding-related demand, but volumes were nevertheless soft compared with 2018, it said, and added, the slowdown was less pronounced among the more organised national and regional chain stores

India’s gold import including through grey channels, the WGC said it declined by 14 percent to 646.8 tonnes in 2019 from 755.7 tonnes in 2018. Imports through the grey market stood at 115-120 tonnes in 2019.

“Imports remained lower due to softening of local demand and 37 percent increase in recycled gold to 119 tonnes in 2019,” Somasundaram said.

“We do believe imports may not rise as fast as demand this year. But do expect custom duty on gold to be reduced to 10 percent from 12.5 percent at present.”

Two-thirds of India’s gold demand comes from rural areas, where jewelry is a traditional store of wealth.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

HC issues summons to Ramdev in suit by doctors over misinformation against allopathy

Waqar Younis apologises for ‘Namaz in front of Hindus’ comment

Learning Kannada can’t be forced: Karnataka High Court

‘Fire shots’: B’luru pub ordered to pay Rs 74,000 compensation to woman for burn injuries

Udupi: Man found guilty of sexually assaulting a child, sentenced to 10-year jail term

Ayodhya included in Delhi govt free pilgrimage scheme: Kejriwal

Pegasus snooping matter: Cong welcomes SC order

Related Articles More

Paytm to hike IPO size to Rs 18,300 crore as Alibaba’s Ant, other investors dilute more stake

Dabur withdraws ad on Karwachauth, tenders unconditional apology

Bombay HC restrains Zee Entertainment’s shareholder Invesco from requisitioning EGM

Drug controversy has not dented Shahrukh Khan’s popularity as brand: Experts

Gadkari bats for green hydrogen; says India needs to reduce oil imports


Byadagi Chilli Cultivation

The real Rajinikanth a journey from Bus conductor to Superstar

There are many problems in this school. Not just one or two.

News Bulletin 26-10-2021


Latest Additions

M’luru: Absence of permanent ‘firing range’ causes worries!

HC issues summons to Ramdev in suit by doctors over misinformation against allopathy

Waqar Younis apologises for ‘Namaz in front of Hindus’ comment

Assault on workers: Eight police teams hunt for film producer’s family

Airtel CEO warns users about cyber-fraud cases becoming ‘alarmingly frequent’

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.