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Dip in gold demand!
Posted on: 14/Aug/2015 12:12:03 PM
The demand for gold in India, during the quarter that ended in June 2015 was 25 percent lesser. During the second quarter this year, 154.4 tonnes of gold was bought by the country which was 204.9 tonnes during the same quarter last year. Buoyant stock market and softening rural economy due to unseasonal rainfall that resulted in damage of crops, dip in demands related to wedding are some of the reasons for this fall in demand, says P.R. Somasundaram, MD India, WGC. The total gold demand value was Rs 37,590.2 crore during this period which was Rs 50,778.1 crore last year in the same quarter.
The total demand during the second quarter last year was 204.9 tones, WGC said in its Gold Demand Trends for the second quarter of this year. This decline in demand has largely affected the rural jewelers.
The overall demand this year is expected to be around 900 tonnes. As the rural confidence is likely to be up, the demand for gold in the second quarter is expected to be 25 percent more than the first. The economy will surge by Diwali time when savings will get back to gold, said Mr Somasundaram. He added that the gold monetization scheme by the central government will have no effect in reducing demand for gold in the country.
This scheme however will induce recycling of gold. On the whole, globally, recycling of gold accounts for 33 percent of demand in the metal which is 10 percent in India, he added. In the same quarter last year, the demand was 152.6 tonnes which has come down by 23 percent and arrived at 118 tonnes. The value of demand in jewelry fell by 24 percent touching Rs 28,703 crore from Rs 37,807 crore that prevailed in 2014. The investment demand was 30 percent down at 36.5 tonnes which was 52.3 tonnes last year, according to WGC.
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