Demand for gold in India between January and March 2018 fell by 12% to 115.2 tonnes against 132.5 tonnes during the same period last year, the World Gold Council (WGC) said.
In value terms, the fall was by 8 per cent — from Rs 34,400 crore to Rs 31,800 crore during the first three months of this year.
Local gold price rises led to the second weakest quarter for jewellery demand in almost 10 years. After the strongest Q4 on record in 2017, Indian jewellery demand saw a sharp downturn in Q1 2018, falling 12% year-on-year.
“A substantial drop in the number of auspicious wedding days during the period compared with Q1’17, could be a factor for muted demand as consumers made less wedding-related purchases,” said Somasundaram PR, Managing Director, India of the WGC.
Of this, the total Jewellery demand in India for these three months was 87.7 tonnes against 99.2 tonnes in Jan-March 2017. The value of jewellery demand in was Rs 24,130 crores, a drop of 7% from the three corresponding months in 2017 which was at Rs. 26,050 crores.
Total gold recycled in India during the first three months of 2018 was 14.1 tonnes, a drop of 3% compared to 14.5 tonnes in the same period last year.
“For year 2018, full year gold demand expectations for India is in the range of 700 – 800 tonnes,” said Somasundaram.
Gold imports were also down 50% year-on-year, in anticipation of an import duty cut in the budget that did not materialise, he added.
According to WGC India, trade activity during the beginning of the next quarter from April resumed positively during Akshaya Tritiya, demonstrating the resilience of the industry. Policy focus on doubling farm income and ease of business under GST augur well for the gold industry in 2018 and the medium term.
“New ways of buying gold through digital platforms are catching up quickly; this will not just promote ease of savings but bring about a mindset change, thereby enhancing acceptability of centrally vaulted gold – which underpins any attempt to mainstream gold including Gold Monetisation Scheme,” Somasundaram said.
For year 2018, full year Gold demand expectations for India in the full 2018 year is in the range of 700 – 800 tonnes, he added.