Jewellery demand shines on import duty cut: WGC

Mumbai: India’s gold demand witnessed an 18 per cent on-year growth during the July-September quarter of this year to 248.3 tonnes, as the reduction in gold import duty resulted in a revival in jewellery demand, the World Gold Council (WGC) said in a report on Wednesday.

The overall gold demand during the corresponding quarter of last year stood at 210.2 tonnes, according to the WGC’s Q3/2024 Gold Demand Trends report. However, with gold prices ruling at all-time highs, there might be an increased trend for investors to wait for price corrections. The full-year gold demand is likely to be in the range of 700-750 tonnes, slightly less than last year, as Dhanteras and wedding season is likely to boost overall gold demand. In 2023, India’s gold demand stood at 761 tonnes. On Tuesday, gold price rose by Rs300 to Rs81,400 per 10 grams, near its record high level, in the national capital due to heavy demand for Dhanteras by jewellers and retailers.

In terms of value, gold demand went up by 53 per cent to Rs1,65,380 crore during the third quarter of this calendar year, compared to Rs1,07,700 crore in the same period of 2023. Total jewellery demand during the July-September period increased by 10 per cent to 171.6 tonnes, compared to 155.7 tonnes in the same period in 2023.

“India’s gold demand in Q3 2024, witnessed an 18 per cent year-on-year increase touching 248.3 tonnes. Sharp cut in gold import duty in July sparked a revival in jewellery demand, which posted its strongest third quarter since 2015 with 10 per cent increase to 171.6 tonnes as compared to 155.7 tonnes in Q3 2023,” WGC Regional CEO, India, Sachin Jain told PTI.

Momentum in consumer demand picked up sharply in late July and remained strong until mid-September, Jain added. Besides, reduction in gold import duty, some of the other factors that boosted India’s gold demand include the continued buying streak by the Reserve Bank of India and good monsoon, acted as a catalyst for robust growth in lower tier cities and rural areas. Going forward, Jain said, India’s gold demand remains solid in the fourth quarter due to Dhanteras and wedding demand, although with the continued rise in the gold price offsetting the impact of the duty cut, there might be an increased trend for investors to wait for price corrections as opportunities to add to their holdings.