India’s gold demand rises 19% in June quarter, lags pre-Covid level

With this, overall gold demand in the first half of the calendar year 2021 rose 30% to 216.1 tonne but it still trailed the pre-pandemic five-year (H1 of 2015-2019) average by as much as 35%.

Gold demand in India, the world’s second-largest consumer, rose 19% year-on-year to 76.1 tonne in the June quarter, driven primarily by a favourable base due to a nation-wide lockdown last year, according to the data released by the World Gold Council (WGC) on Thursday.

But on a quarter-on-quarter basis, demand plunged 46% during the April-June period, as the second Covid wave prompted some state governments to resort to localised lockdowns. With this, overall gold demand in the first half of the calendar year 2021 rose 30% to 216.1 tonne but it still trailed the pre-pandemic five-year (H1 of 2015-2019) average by as much as 35%.

Although the performance in the first half is far from encouraging, the WGC expects the underlying demand momentum to support a “sharp spike in demand once normalcy is restored on the Covid front”. In the December quarter, festivals, such as Dussehra and Diwali, coupled with the wedding season, could boost gold consumption. Of course, consumer confidence and business response are subject to the impact of a looming threat of the third Covid wave and the pace of economic recovery.

The WGC data showed gold imports in India shot up to 120.4 tonne during the April-June quarter from just 10.9 tonne a year earlier when a nation-wide lockdown had hit the supply chains. In value term, the country’s gold demand rose 23% in the April-June period to Rs 32,810 crore. While jewellery demand rose 29%, investment demand rose by 10%. However, in volume term, jewellery demand rose at a slower pace of 25% to 55.1 tonne, while investment demand grew 6% to 21 tonne.

Total gold recycled during the June quarter was 19.7 tonne, up 43% from a year before.

Global demand falls 1%

Global gold demand eased 1% on year to 955.1 tonne in the June quarter, taking the demand in the first half of the calendar year to 1,833.1 tonne, down 10% from a year before. At 390.7 tonne, jewellery demand continued to rebound from last year’s Covid-hit weakness, but it still remained well below typical pre-pandemic levels, partly due to weaker growth in Indian demand, the WGC said.

In the first half, jewellery demand dropped 17%. However, bar and coin investment saw a fourth consecutive quarter of strong gains, with demand hitting 243.8 tonnes in the April-June period. Such investments hit 594 tonnes in H1, the strongest since 2013.