As per the World Gold Council report, India’s gold demand during July-September quarter this year shot up 39% to 225.1 tonnes against the overall third quarter demand in 2013, on rise in jewellery sales. The overall third quarter demand in the country for 2013 stood at 161.6 tonnes. Gold demand during the period in terms of value rose 31% to Rs 56,219.3 crore compared with Rs 42,829.6 crore in the third quarter of 2013. However, investments demand in India over the same period declined by 10% to 42.2 tonnes.
Similarly, the total jewellery demand was up by 60% at 182.9 tonnes against 114.5 tonnes in the same period last year. The value of jewellery demand surged by 51% to Rs 45,681.6 crore from Rs 30,346.5 crore in the third quarter of 2013. The rise in demand for gold jewellery during third quarter of 2014 reflects the unusual low base of third quarter of 2013 that was impacted by the introduction of a range of duty increases and restrictions.
The demand around Diwali reflected the general optimism seen in the country. The import restrictions have had little impact on demand for gold and yet have strengthened the unauthorized supply channels and seem at odds with the overall sentiment that defines the new government’s business approach.