Gold demand in India fell by 32% during third quarter of this fiscal, 2019-20


Demand for gold in India for Q3 2019 fell by 32 per cent at 123.9 tonnes as compared to overall Q3 demand for 2018 (183.2 tonnes). India’s Q3 2019 gold demand value was Rs 41,297 crores, down by 18 per cent as compared to Q3 2018 (Rs 50,085 crores). Total Jewellery demand in India for Q3 2019 also decreased by 32 per cent at 101.6 tonnes as compared to Q3 2018 (148.8 tonnes). The value of this jewellery demand was Rs 33,851 crores, down by 17 per cent from Q3 2018 (Rs. 40,687 crore).

Somasundaram PR, Managing Director, India, World Gold Council said: “Gold demand in India declined by 32 per cent to 123.9 tonnes in Q3, due to weak consumer sentiment and high prices. Despite a step-up in buying during Akshaya Tritiya in Q2; monsoons, the absence of any major festivals and intervening inauspicious periods like Pitru-Paksh, muted demand in Q3. And the drop this year has been significant, making it one of the lowest third quarters since 2005.

This was due to low levels of general consumer confidence following a lot of noise about an economic slowdown and a lack of appreciation of the secular nature of price movements. The increase in custom duty in the July budget from 10 per cent to 12.5 per cent, also did not help. The sharp rise in the gold price and deep discount in the cash bullion market impacted both trade and the consumer outlook in Q3.

The gold price rally failed to lose momentum during the quarter, breaching the Rs 35,000/10g level in mid-July and continued to climb to Rs 38,795/10g by the end of August. This ~Rs 5,000/10g leap in two months caught consumers completely off-guard, prompting many to delay buying and the domestic gold price reached an all-time historic high of Rs 39,011/10g in the first week of September.

The following softening of prices in the final few weeks of the quarter – due to the decrease in the international gold price and a strengthening rupee – actually led to expectations of a further drop and hence, did not aid demand. “Our full year gold demand estimate for India is 700-750 tonnes, although more likely at the lower end of the range. This will be a little above the 2016 level – which faced disruptions due to jewellers’ strikes, the introduction of PAN and demonetization,” Somasundaram estimated.

Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at

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