Informist, Friday, May 5, 2023

--WGC: India Jan-Mar gold demand at 112.5 tn, down 17% on year

--India Jan-Mar net bullion imports at 134 tn, unchanged on year

--India gold dore imports in Jan-Mar at 30.3 tn vs 51.7 tn yr ago

--India Jan-Mar demand for gold jewellery at 78 tn, down 17%

--India Jan-Mar gold recycling at 34.8 tn vs 27.8 tn year ago

--India's invest demand for gold 34.4 tn Jan-Mar, down 17% on yr

MUMBAI – Demand for gold in India slipped 17% on year to 112.5 tn in the March quarter, as record high domestic prices hit demand for jewellery, the World Gold Council said in its Gold Demand Trends report today. In terms of value, India's gold demand during the quarter was down 9% on year at 562.20 bln rupees, compared with 615.40 bln rupees in the same period last year.

High gold prices led to a rise in smuggling activity in order to avoid import duties. This boosted demand in smaller cities, and among independent retailers, for whom cash purchases are more commonplace, WGC said.

"Since 2010, barring the pandemic gap, this is the fourth time that Q1 gold jewellery demand fell below 100 tonnes," said Somasundaram P.R., regional chief executive officer, India, World Gold Council. 

"Sharp rise in gold prices and volatility combined with fewer auspicious days to trigger consumption, has led to many households deferring buying perhaps in anticipation of a downward price correction," Somasundaram said.

The country's demand for gold jewellery declined 17% on year to 78 tn in the March quarter. Investment demand for the precious metal fell 17% on year to 34.4 tn.

India's net bullion imports in Jan-Mar were flat at 134 tn, while imports of gold dore fell to 30.3 tn from 51.7 tn.

Gold recycling rose to 34.8 tn in the March quarter from 27.8 tn a year ago.

The Reserve Bank of India bought 7 tn of gold in Jan-Mar, taking the country's gold reserves to 795 tn, according to the report. 

"Our forecast for the gold demand is muted for 2023 even as the economic momentum in India remains healthy and the RBI rate hike cycle has paused. The outlook for gold purchases is highly dependent on rupee prices, which show no sign of abating, and which will act as a deterrent, and of course monsoons, though Q4 as always, could throw a surprise," Somasundaram said.

"We believe current trends point to less than 800 tonnes of demand for 2023."  End

US$1 = 81.80 rupees

Reported by Sandeep Sinha

Edited by Avishek Dutta

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