A salesman shows gold bangles to a customer at a jewelery showroom in Mumbai. , Photo Credit: Reuters
According to the World Gold Council (WGC), gold demand in India for Q1 2023 (January to March) declined by 17% to 112.5 tonnes as compared to total demand of 135.5 tonnes in the year-ago period with higher prices.
India’s gold demand value during the quarter stood at ₹56,220 crore, down 9% from ₹61,540 crore in the year-ago period.
According to the data released by WGC, the total jewelery demand in India for the first quarter of 2023 declined by 17% to 78 tonnes as compared to 94.2 tonnes a year ago.
Aggregate investment demand for the quarter declined by 17% year-on-year (YoY) at 34.4 tonnes. In value terms, investment demand for gold stood at ₹17,200 crore in the quarter, down 8%.
Total gold recycled in India during the quarter stood at 34.8 tonnes, up 25% from 27.8 tonnes in the same period last year. Total net bullion imports in the quarter stood at 134 tonnes, similar to the year-ago period.
“Record high and volatile gold prices hit sentiment and demand for gold jewelery fell by 78 tonnes,” said Somasundaram PR, Regional CEO, India, World Gold Council. He said that on Thursday, the retail price of gold per 10 grams including taxes was Rs 64,500, which is an all-time high.
Since 2010, barring the pandemic gap, this is the fourth time gold jewelery demand has declined by less than 100 tonnes in the January-March period.
“Due to the sharp rise in gold prices and volatility with fewer auspicious days to trigger consumption, many households have probably deferred purchases in anticipation of a downward price correction,” he added.
“Our forecast for gold demand is muted for 2023, even as economic momentum in India remains healthy and the RBI rate hike cycle halts,” he added.
“The outlook for gold buying is highly dependent on rupee prices, which shows no sign of easing, and which will act as a deterrent, and of course the monsoon, although the October-December quarter will, as usual, Might throw a surprise. We believe current trends point to demand for 2023 of less than 800 tonnes.
While global gold demand (excluding OTC) was down 13%, improvement in the OTC market pushed total gold demand to 1,174 tonnes, a marginal increase of 1% over the year-ago period.
“Central banks helped boost demand by adding 228 tonnes to global reserves. The WGC said the continued and significant buying from the official sector underscores the role of gold in international reserve portfolios at a time of market volatility and heightened risk.