Mumbai, Nov. 23: The festive and marriage season helped prop up gold demand in the country during the third quarter of the current calendar year. According to the World Gold Council, India recorded a 8 per cent year-on-year average fall in tonnage terms during the period compared with a whopping 44 per cent decline in the first half.
According to Gold Demand Trends, while consumer demand for jewellery during the third quarter came down to 116.4 tonnes against 127.2 tonnes in the corresponding period last calendar year, retail investment was down 21 per cent at 15.5 tonnes.
Hiroo Mirchandani, associate director of Jewellery-India, WGC, said, “The festive and marriage season has helped gold demand recover in India. Despite high prices in the last quarter, imports picked up in August and September and continued in October. Higher gold prices translated into better investment value for gold consumers, who continued to be bullish on gold.”
WGC added that trade and consumers appeared to have adjusted to a price in excess of $ 300 per ounce or in the Rs 15,000-15,500 per ounce range gauging by official imports in August and September that were higher by 15 and 33 per cent respectively than a year earlier.
The council however, pointed out that many consumers remained cautious and heavy promotion of diamonds and platinum restrained demand for high-priced gold jewellery.
Another problem which will affect rural demand (accounting for over 60 per cent of total Indian demand) for the rest of this year and into next year, is poor rainfall experienced this year. Rainfall was 19 per cent below normal with 21 out of 36 meterological sub-divisions receiving deficient or scanty rainfall.
“Notwithstanding the monsoon, all reports indicate that imports in October when the price again eased slightly were very strong as Diwali approached and buying remained vibrant,” it said, adopting a cautiously optimistic stance.
According to the WGC, an important highlight during the quarter was buyers becoming accustomed to prices in excess of $ 300 per ounce and later to those in excess of $ 310 per ounce. This was despite the weak world economy, rise in dollar price of the yellow metal and continued price volatility. Gold was thus being built as an investment among both individuals and institutions in the globe.
Meanwhile, gold prices today remained firm with standard gold finishing at Rs 5240 (ten gram), a rise of Rs 30 over its previous close.