The severe impact of the lockdown on employment, income and small businesses caused Indians to sell gold or borrow against it
India is facing a supply glut as people reduce buying and start selling their family jewellery amid COVID-19-related restrictions and consequent economic fallout.
International investors have been hoarding gold, shifting to the yellow metal due the COVID-19 pandemic and geopolitical tensions, according to a Wall Street Journal report.
Investors have been spending gold coins, bars and exchange-traded funds, the report said. The price of gold, which is considered a "safe haven" asset, hit a record high in July.
Due to COVID-related restrictions, fewer Indians are visiting jewellery stores and holding weddings, which are a major source of gold demand, industry officials and store owners told the publication.
The severe impact of the lockdown on employment, income and small businesses caused Indians to sell gold or borrow against it, The WSJ reported.
"There was no other way to arrange the quick cash, which we really needed," A resident of Delhi, who sold her family jewellery to pay for the construction of a new home, told the paper.
Jewellery demand in India, the world's second largest consumer of gold, plummeted 74 percent in the three months through June, according to the World Gold Council.
According to data from the Centre for Monitoring Indian Economy (CMIE), 18.9 million salaried individuals have lost their jobs since the lockdown began.