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Gold demand of India rises 10% in September quarter

01 Nov 2018 Evaluate

The World Gold Council (WGC) in its latest 'Q3 Gold Demand Trends' report has stated that gold demand of India registered 10% rise to 183.2 tonne in the September quarter from a year earlier, as prices fell significantly resulting in bargain buying. However, going forward the seasonal spike in gold demand could be moderate this Dhanteras-Diwali, owing to factors like a lack of liquidity and rising prices.

The report stated that in value terms, the country's September quarter gold demand went up by 14% to Rs 50,090 crore, compared to Rs 43,800 crore. It said a dip in the gold price in the early part of the quarter to around Rs 29,000 per 10 grams (with taxes) - its lowest level since January 2018 - spurred demand. The rupee's depreciation however, impacted the local price which surged sharply to around Rs 32,000-33,000 per 10 grams (without taxes) and demand eased towards the later half of the quarter.

WGC further said a combination of factors such as lack of buying occasions, disruption caused due to floods in a key gold market (Kerala) and an intervening inauspicious period affected demand. The last quarter of the year (October-December) is normally a vibrant period for gold related purchases as demand rises amid festivals and wedding season. However, the seasonal spike in demand could be moderate this year due to factors like a lack of liquidity, rising Indian prices and impending elections in some key states impacting trade logistics.

The report noted that the total jewellery demand for the September quarter of this year was up by 10% at 148.8 tonne compared to 134.8 tonne in same period last year. In value terms jewellery demand saw 14% growth at Rs 40,690 crore in the third quarter this year from Rs 35,610 crore in the corresponding quarter of 2017. According to the report, total gold recycled in the country declined by 13.85 percent to 23 tonne, compared to 26.7 tonne in the same quarter of 2017.

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