Hyderabad: Demand for gold in India increased by 37 percent during the first quarter (Q1) of 2021 to 140 tons, compared to total Q1 demand for 2020 at 102 tons, while demand for gold was 58,800 crs, an increase of 57 percent compared to Q1 2020 at 37,580 million.
The total demand for jewelery during the first quarter of 2021 increased by 39 percent to 102.5 tons, compared to 73.9 tons in the first quarter of 2020. The value of the demand for jewelery was 43.100 million kroner, which is a increased by 58 percent compared to 27,230 million in Q1 2020.
Total recycled gold decreased to 14.8 tonnes during the first quarter of 2021, compared to 18.5 tonnes in the first quarter of 2020, a decrease of 20 percent. Net gold imports into India in the first quarter of 2021 were 301 tons, compared to 83.1 tons in the first quarter of 2020, which recorded a 262 percent increase.
Somasundaram PR, MD, India, told the World Gold Council: ‘India’s Q1 2021 gold demand has risen by 37 per cent to 140 tonnes due to covid inclusion and positive sentiment after the start of the vaccination program. A combination of softening gold prices, lively consumer sentiment following a sharp increase in economic activity and the return of social activities such as weddings, supported a 39 per cent growth in demand for gold jewelery at 102.5 tonnes. “
The average domestic gold price of 47,131 Rs per 10 grams was 14 percent higher year-on-year (yoy), but six percent lower quarter-on-quarter, and significantly, 16 percent lower than the August 2020 peak, 56,000 Rs per 10 gm. . The prices, which are lower than 50 000 Rk per 10 grams, have removed a psychological barrier for consumers and encouraged the purchase and marriage-related hire purchase, which raises the demand, ‘he added.
Indian retail demand for gold investments also improved for a third consecutive quarter. Bar and coin demand grew by 34 percent yoy to 37.5 tonnes – the strongest first quarter in India since 2015.
Influencing factors
A reduction in customs duties on gold, coupled with an appreciative rupee during much of the quarter, contributed to lower prices and offered significant buying opportunities for retail investors. Small rods (of 50 g and 100 g denominations) were apparently very popular in the first quarter.
Official gold imports rose during the quarter – to a record high of 301 tonnes. The strong demand from consumers, coupled with the build-up of shares among the trade ahead of major festivals (including Akshaya Tritiya in May), was the main driver for the sharp rise in imports, he noted.
However, the outlook for the coming quarter is cautious. As lockouts in different regions of the country are reintroduced in response to increase Covid-19 consumer confidence has fallen. This is likely to affect the demand for weddings in the second quarter of 2021.
Source: Telangana Today