India’s gold demand for the April-June quarter of 2020 contracted to 63.7 tonnes, a decline of 70% compared with 213.2 tonnes in the same period last year. This is an 11-year low, World Gold Council (WGC) said.

The lowest demand was last witnessed in the January-March quarter of 2009 at 40 tonnes.

India’s gold demand during the quarter was valued at ₹26,600 crore, down by 57%, compared with ₹62,420 crore a year earlier, WGC data showed. Total jewellery demand in India decreased 74% to 44 tonnes. It stood at 168.6 tonnes in the April-June quarter of 2019.

The value of jewellery demand was ₹18,350 crore, down by 63% from ₹49,380 crore in the same period last year. Total investment demand for the quarter at 19.8 tonnes was a 56% fall compared with 44.5 tonnes in the same period last year.

In value terms, demand for gold investment was ₹8,250 crore, down by 37%.

Total gold recycled was 13.8 tonnes, down by 64% y-o-y.

Total gold imports during the quarter was 11.6 tonnes, down by 95% compared with 247.4 tonnes year-on-year.

Addressing a video conference, Somasundaram P.R., managing director, India, World Gold Council, said, “The quarter was defined by lockdowns and high prices, both of which acted in combination to keep India’s gold demand at a record low of 63.7 tonnes, down 70%.”

“Sales trend during the window of opportunity afforded by relaxation of lockdown in select cities, do point to healthy latent demand that should surface once [the] COVID-19 turbulence is behind us,” he added.

Demand for jewellery plunged dropped by 74% to 44 tonnes, in an atmosphere of fear and uncertainty where weddings were postponed or just turned out to be uncharacteristically quiet and private, he added.

Investment demand fared relatively better, with demand dropping lower at 56% to 19.8 tonnes, as gold’s safe haven attributes and perhaps some price increase anticipation attracted HNIs and investors.

He said with gold price currently at a life-time high of over ₹50,000/10gms, the demand trend in the future remained uncertain, but the July to September quarter will be better than the previous quarter, which was mostly a washout due to the lockdown.

“To put it in perspective, gold prices have risen by 60% since January 2019 and 20% since January 2020; income growth or expectation have not kept pace with this,” he said.

“As we are still in the midst of the crisis without clear sight of many variables on consumer behaviour, prices or length of the disruption, we will not be able to quantify the impact on the full-year gold demand in India,” he added.