Faced with an unprecedented decline in demand, the World Gold Council (WGC) is planning to start consumer marketing of gold in India.

In a conference call, David Tait, Chief Executive Officer, WGC, said, “There is a feeling of depression in the bullion industry due to a sharp decline in retail demand. The recovery did not come the way we expected. There were unprecedented debt and employment issues in the market. So we are looking at consumer marketing of gold in India.”

The fall in gold demand was led primarily by record high prices In India. The price of the metal is hovering around Rs 45,500 per 10g on safe haven appeal. In global market, it is being traded at nearly $1,660 an oz.

The WGC will also promote digital gold sales in India, with physical offtake having declined significantly over the past few months due to closure of retail stores and factories. They were forced shut following the lockdown that was imposed by the government to arrest the spread of Covid-19.

WGC, like other global bodies for luxury items, used to invest on promoting gold in India, but has not done so durimg the past decade or so. Tait, however, did not divulge the amount of money global miners are planning to spend on sales promotion in India.

Divulging the short- and long-term view on the price of gold, which is hovering at record levels both in India and abroad, Tait said, “Gold as an investment vehicle and as a luxury item will benefit in both scenarios and in any form including exchange trade fund (ETF).”

He added that people have started questioning the long-term viability of the financial system and the mistakes committed by the world in handling the current crisis.

Meanwhile, WGC is working closely with large institutions for a bullion exchange in India. It is also working with assaying centres in order to build consumers’ trust in gold. Many of the six million employees in the Indian Jewellery sector have been impacted by the Covid-19 lockdown.

“Customers above 35 years of age see that the worst is behind and may come back to purchase jewellery. Those above this age have other responsibilities such as family, and reviving saving plans and cash flows that have gone for a toss. Therefore, they will cut down consumption on short run,” said Ajoy Chawla, CEO, Tanishq.

Consumers may look at buying lower ticket size jewellery and may go in for larger purchases only for occasions like weddings. Geographic dispersion of sentiment would also play a pivotal role in jewellery selling, said Chawla.