India's Q1 gold demand up 5%

Mumbai: India's gold demand rose 5 per cent to 159 tonnes during January-March period this year on fall in prices that boosted jewellery sales during wedding season, a World Gold Council (WGC) report says.

Gold demand stood at 151.5 tonnes in the first quarter of 2018, according to WGC's 'Q1 Gold Demand Trends' report.

In terms of value, there was a 13 per cent growth during the quarter at Rs 47,010 crore compared to Rs 41,680 crore in the same period last year.

"The strengthening of the rupee and the fall in local gold prices towards the later part of the quarter triggered a rise in Q1 gold demand to 159 tonnes.

Growth of 5 per cent in Indian jewellery demand to 125.4 tonnes uplifted global demand and boosted retail sentiment.

The increase in auspicious wedding days during the quarter to 21 days from 8 in the same period of 2018 also played a crucial role in increase in demand," WGC MD, India, Somasundaram PR said.

Gold prices dropped to Rs 32,000 per 10 grams by the first week of March, he added.

Also, he said, there was a jump in volume following stringent checking during the ongoing elections controlled the grey market, which benefitted the organised retail industry.

"Smuggling has come down, however structurally nothing has changed. Unless some policy decision is taken like reducing the Customs Duty to a reasonable level the grey market will bounce back after the elections," he added.

Total jewellery demand in the first quarter was up by 5 per cent at 125.4 tonnes compared to 119.2 tonnes in the corresponding period of 2018.

In value, jewellery demand grew by 13 per cent to Rs 37,070 crore against Rs 32,790 crore in the same quarter of 2018.

Total Investment demand for Q1 2019 was up by 4 per cent at 33.6 tonnes from 32.3 tonnes in the same period of 2018.

In value terms, gold investment demand went up by 12 per cent to Rs 9,940 crore from Rs 8,890 crore in first quarter of 2018.