Gold demand by consumers in India fell by 32% to 123.9 tonnes in the September 2019 quarter, according to the World Gold Council (WGC) data. This is the lowest quarterly demand in three years.
Gold prices in India have increased by around 20% since the first week of June 2019 and closed at ₹38,692 per 10 grams on India’s Multi Commodity exchange (MCX) on November 4, 2019.
This fall is the highest after March 2016, when the demand fell by 43.78%. To be sure, the demand had further reduced in the next two quarters – June 2016 and September 2016 – by 23% and 29% respectively.
The decline in import was steeper as jewellers met their demand with old imported stock and recycling, news agency PTI quoted the WGC as having said on Tuesday. India’s cumulative imports in the first nine months of this year stood at 496.11 tonnes compared to 523.93 tonnes during the January-September 2018 period, as per the WGC data.
This is 5.31% less compared to the same period last year. The biggest fall was in 2016 when cumulative gold demand fell by 32% in the first nine months of the year.
{{/usCountry}}This is 5.31% less compared to the same period last year. The biggest fall was in 2016 when cumulative gold demand fell by 32% in the first nine months of the year.
{{/usCountry}}“In India, there was decline in gold demand due to two reasons. One was sharp increase in prices by 20% towards the end of Q2 and in Q3. The second reason was that, in various countries including India and China, general economic slowdown affected the consumer sentiment,” industry group WGC India managing director Somasundaram PR told PTI.
Multiple factors led to the lower demand for gold in India in 2019, Tapan Patel, senior manager at HDFC Securities, said.
“The hike in import duty in budget hit the import demand which added 2.5% weight to the importers,” he said, adding that the longer monsoon season and heavy flooding in some parts of the country has also restricted the farmers’ spending on gold.