India’s gold demand during July-September quarter this year shot up 39 percent to 225.1 tonnes against 161.6 tonnes in third quarter of 2013 mainly driven by strong buying from the jewellery sector, as per the World Gold Council (WGC) report. The WGC also attributed the sudden increase in country’s gold demand to unusual low base of third quarter of 2013 that was impacted by the introduction of a range of duty increases and restrictions.
The report further highlighted that the total jewellery demand was up by 60 per cent at 182.9 tonnes during third quarter of current year against 114.5 tonnes in the same period last year. On global front, the WGC report highlighted that global gold demand fell by 2 percent to five year low at 929 tonnes in the third quarter. China, which was top gold consumer in last year, saw a 39 percent drop in jewellery consumption as well as a 30 per cent fall in bar and coin investment. India once again took over as the world's biggest gold consumer, buying 225.1 tonnes of gold jewellery, coins and bars last quarter, compared to 182.7 tonnes in China.
Gold imports in India surged nearly 450 percent in September and around 175 per cent in August, despite a strict norms like 80/20 rule and high custom duty at 10 percent. The RBI recent move to partly relax the gold norms by permitting nine premium and star trading companies to import gold can also attributed to increase in gold imports. Concerned over the sudden spike in domestic gold imports, Finance Ministry and RBI are likely to meet soon to review gold import curbs.