India’s gold demand declined 18 per cent to 135.5 tonnes within the first three months of this yr, primarily as a result of a pointy rise in costs, in keeping with the World Gold Council (WGC). The demand stood at 165.8 tonnes within the first three months of 2021.
In phrases of worth, gold demand dropped 12 per cent to Rs 61,550 crore within the January-March interval. It stood at Rs 69,720 crore within the year-ago interval, the ‘Gold Demand Trends Q1 2022’ report launched by the WGC mentioned. WGC Regional CEO, India, Somasundaram P R instructed PTI that gold costs started rising in January, growing by 8 per cent to Rs 45,434 per 10 grams (with out taxes) within the first quarter of this yr, primarily as a result of geopolitical tensions.
In comparability, the costs had been at round Rs 42,045 crore in January-March 2021 interval.As per the report, whole jewelry demand within the nation through the newest March quarter fell 26 per cent to 94.2 tonnes. It was at 126.5 tonnes in the identical interval final yr.In phrases of worth, jewelry demand plunged 20 per cent to Rs 42,800 crore within the first quarter of this yr. The identical was at Rs Rs 53,200 crore within the year-ago interval.
“After rising to record levels in the fourth quarter of 2021, India’s gold jewellery demand fell by 26 per cent year-on-year in the first quarter of this year to 94 tonnes. Since 2010, barring the pandemic periods, this is only the third time the first quarter total has been below 100 tonnes,” Somasundaram mentioned. Further, he mentioned that fewer auspicious days coupled with a pointy rise in gold costs meant fewer weddings and a pause in retail demand, with households suspending gold shopping for in anticipation of a value correction.
This yr, he mentioned the general demand for gold is more likely to be round 800-850 tonnes.Total funding demand for gold elevated 5 per cent to 41.3 tonnes within the newest March quarter in comparison with 39.3 tonnes in the identical interval a yr in the past. According to the report, in worth phrases, gold funding demand was up 13 per cent at Rs 18,750 crore. It was at Rs 16,520 crore in the identical quarter of 2021.
Investment demand, primarily gold bars and cash, nevertheless, grew 5 per cent to 41 tonnes, rising costs and volatility in fairness markets performing as assist, Somasundaram mentioned.The Reserve Bank of India (RBI) continued to purchase the yellow metallic and acquired 8 tonnes through the first quarter of this yr, he mentioned, including that the central financial institution started shopping for gold from late 2017, and since then, have purchased 200 tonnes.
During the primary quarter of 2022, whole gold recycled inthe nation surged 88 per cent to 27.8 tonnes. The identical was at 14.8 tonnes within the year-ago interval.Total internet bullion imports within the newest March quarter fell 58 per cent to 132.2 tonnes as in opposition to 313.9 tonnes in the identical interval of final yr.With safe-haven demand and rupee depreciation pushing gold costs above Rs 50,000 per 10 grams, Somasundaram mentioned discussions with merchants revealed that many of the shopping for was of decrease ticket gadgets corresponding to 10 grams and under.
“Overall, Indian gold demand fell 18 per cent this quarter and with recycling up by 88 per cent, net bullion imports for the quarter was lower by 58 per cent year-on-year. The hiatus in growth could be a result of mixed sentiments in the market about price, uncertainty about COVID caused by news in the neighbouring market, fear of inflation and long term impact of the global conflict,” he mentioned.
Geopolitical uncertainties, particularly within the wake of the Russia-Ukraine battle, is anticipated to push extra traders to purchase gold for diversification in addition to hedging function.
“The impact of revival in the rural markets, more particularly with the forecast of a normal monsoon for a fifth consecutive year, is likely to be significant for gold in 2022,” Somasundaram mentioned.
Source: www.financialexpress.com”