India’s gold demand grew by 9.1% to 727 tonnes in 2017 from 666 tonnes in the previous year, according to World Gold Council (WGC), with the fourth quarter faring the best as demand, supply and trade rose.
“Jewellery demand reached the highest fourth quarter level that we have seen in our 17-year series. This increase in demand was driven by a number of events, including lower gold prices coinciding with Dhanteras, a positive economic backdrop and improved consumer sentiment, particularly in the rural areas, as the effect of demonetisation wore off,” said Somasundaram PR, Managing Director, India, World Gold Council.
The exemption of gold from the Prevention of Money Laundering Act in the second half of 2017 also revived consumer purchases, helped by the transition to GST progressing along the expected lines.
“Looking ahead, the 2018 Budget confirmed various positive initiatives for gold including the development of a comprehensive policy and the creation of a gold exchange. As policy measures unfold, we are optimistic that demand for 2018 will stabilise at 700-800 tonnes,” Somasundaram added.
The gold demand for the full-year 2017 was 726.9 tonnes compared to 666.1 tonnes in 2016, of which around 120 odd tonnes could be through unofficial channels, according to WGC estimates.
Total jewellery demand in India for 2017 was up by 12 per cent at 562.7 tonnes as compared to 504.5 tonnes in 2016. The value of jewellery demand in 2017 was Rs. 148,100 crores, up by 9 per cent from 2016 (Rs. 136,290 crore). Total gold recycled in India in 2017 was 88.4 tonnes as compared to 79.5 tonnes in 2016.
The WGC said it expects the Indian government to come up with a comprehensive National Gold Policy by the end of this year.