MUMBAI: India’s gold demand in the fourth quarter is expected to recover after falling 30% in the previous quarter as festivals are expected to strengthen retail jewellery purchases, the World Gold Council (WGC) said on Thursday.
“We expect quarter four would be better than quarter three due to pent-up demand and festivals,” said Somasundaram PR, the managing director of WGC’s Indian operations.
Demand for the precious metal usually spikes towards the end of the year in India, as buying gold for weddings and major festivals such as Diwali and Dussehra is considered auspicious.
Indians celebrated Dussehra earlier this month and jewellers reported improvement in footfalls and sales, said Somasundaram.
But demand during fourth quarter would still be lower than the 194.3 tonnes recorded last year as consumers are struggling to adjust to near record high prices, he said.
India’s gold demand in the first three quarters fell 49% from a year earlier to 252.4 tonnes as coronavirus-triggered lockdowns hit jewellery demand, the WGC said in a report published on Thursday.
In the third quarter, gold demand fell 30% from a year earlier to 86.6 tonnes as jewellery demand plunged 48% to 52.8 tonnes in the same period, the WGC said.
While overall gold consumption fell, demand for coins and bars, known as investment demand, jumped 51% in the third quarter as rising prices attracted investors, the WGC said.
“The slowdown in real estate and rising gold prices may have prompted unaccounted cash holders to move into gold,” it said.
Scrap gold supplies jumped to 41.5 tonnes in the third quarter, the highest in seven years, as record prices and stress on household finances prompted consumers to liquidate their old trinkets and jewellery, according to the WGC.