Gold jewellery demand falls to seven-year low in 2016
NEW DELHI: Jewellery demand in India declined to seven-year low in 2016 due to nationwide jewellers’ strike in the first quarter of the previous calendar year followed by the demonetisation drive in the last quarter.
Annual consumption of jewellery stood at 514 tonnes in 2016, 148.30 tonnes, or 22 per cent, lower than 662.30 tonnes consumed in 2015. World’s biggest consumer China also witnessed 17 per cent, or 239.40 tonnes, fall in jewellery demand during the year. The country consumed 629 tonnes of gold for jewellery against 753.40 tonnes a year ago.
India and China – the two largest markets – together accounted for almost 80 per cent of the 347.0 tonnes decline in full-year demand. Global gold demand for jewellery slipped 15 per cent on a year-on-year basis to 2,041.60 tonnes in 2016 from 2,388.60 tonnes in 2015.
According to the World Gold Council (WGC), circumstances in India during 2016 created a very challenging environment to collect accurate data on gold demand. “The nationwide jewellers’ strike during January-March 2016 effectively shut down the gold industry. Further difficulties arose when the government’s clampdown on undeclared income — which reached its pinnacle in Q4 with the demonetisation drive – drove an element of gold demand into the shadier grey market,” WGC said in a report.
Demand continued to remain lacklustre during the first few weeks of 2017, as the industry awaited the government’s February 1 Union Budget for confirmation of custom duty for gold and the GST rate to be imposed later this year.
Annual consumption of jewellery stood at 514 tonnes in 2016, 148.30 tonnes, or 22 per cent, lower than 662.30 tonnes consumed in 2015. World’s biggest consumer China also witnessed 17 per cent, or 239.40 tonnes, fall in jewellery demand during the year. The country consumed 629 tonnes of gold for jewellery against 753.40 tonnes a year ago.
India and China – the two largest markets – together accounted for almost 80 per cent of the 347.0 tonnes decline in full-year demand. Global gold demand for jewellery slipped 15 per cent on a year-on-year basis to 2,041.60 tonnes in 2016 from 2,388.60 tonnes in 2015.
According to the World Gold Council (WGC), circumstances in India during 2016 created a very challenging environment to collect accurate data on gold demand. “The nationwide jewellers’ strike during January-March 2016 effectively shut down the gold industry. Further difficulties arose when the government’s clampdown on undeclared income — which reached its pinnacle in Q4 with the demonetisation drive – drove an element of gold demand into the shadier grey market,” WGC said in a report.
Demand continued to remain lacklustre during the first few weeks of 2017, as the industry awaited the government’s February 1 Union Budget for confirmation of custom duty for gold and the GST rate to be imposed later this year.
