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Informist, Tuesday, Jul 30, 2024

 

--WGC: India Apr-Jun gold demand at 149.7 tn, dn 5% on year

--WGC: India Apr-Jun net bullion imports 196.9 tn vs 182.3 tn yr ago

--WGC: India gold dore import in Apr-Jun at 52.6 tn vs 59.4 tn yr ago

--WGC: India Apr-Jun gold jewellery demand at 106.5 tn, dn 17% on yr

--WGC: India Apr-Jun gold recycling at 23 tn vs 37.6 tn year ago

--WGC: India Apr-Jun gold investment demand at 43.1 tn, up 46% on yr

 

MUMBAI – Demand for gold in India fell 5% on year to 149.7 tn in the June quarter primarily due to a sharp decline in jewellery consumption during the period, the World Gold Council said in its Gold Demand Trends report today. Demand for yellow metal was 158.1 tn in the same period last year. In terms of value, India's gold demand during the quarter climbed 14% on year at 939.5 bln rupees compared with 825.3 bln rupees in the same period last year.

 

"India's gold demand softened slightly in (Apr-Jun) Q2 2024... This can be attributed to record high gold prices impacting affordability and causing a slowdown in consumer purchases. However, the overall value of demand remained strong, increasing by 14%, highlighting gold's enduring value for Indian consumers," said Sachin Jain, regional chief executive officer, India, World Gold Council.

 

India's demand for jewellery dropped 17% on year to 106.5 tn in the June quarter. "Along with the record gold price, several other factors contributed to the relatively weak Apr-Jun Q2. The national elections from mid-April to early June proved disruptive to gold jewellery consumption, as did the severe heatwave that saw record temperatures in Delhi at the end of May," the global body said. 

 

During the June quarter, investment demand for bullion surged 46% at 43.1 tn, the highest second-quarter level since 2014, driven by expectations of further price appreciation and safe-haven buying. 

 

Investments in gold exchange-traded funds also saw positive inflows of over 2 tn because of the surge of inflows in multi-asset funds. Gold exchange-traded funds have benefited from these inflows, given that multi-asset funds are mandated to allocate at least 10% of their portfolio to each of three asset classes--equities, debt and commodities--and the strong gold price performance attracted particular attention in the latter category, the report said.

 

Gold reserves with the Reserve Bank of India increased 19 tn during the June quarter. The RBI has added gold every month so far this year, with year-to-date net purchases totalling 37 tn, more than its annual net buying in both 2022 (33 tn) and 2023 (16 tn), the World Gold Council said.

 

India's net bullion imports rose to 196.9 tn in Apr-Jun from 182.3 tn a year ago, and were up 9.8% from 179.4 tn a quarter ago. The import of gold dore fell to 52.6 tn from 59.4 tn a year ago.  

 

"The recent 9% reduction in import duty on gold is expected to revive gold demand in the July quarter ahead of the main festive season that begins from September, which could be further boosted by a healthy monsoon," Jain said. "India's economic outlook too remains positive with strong GDP forecasts, and rural sector recovery are all likely to support demand in the second half of the year. Our forecast for full-year demand is between 700 and 750 tn," he said.

 

Gold recycling fell to 23 tn in the June quarter from 37.6 tn a year ago. "Bucking global trends... as consumers, rather than cashing in, opted for an exchange of old jewellery for new. This indicates limited distress selling, and points to highlighting gold's enduring role as a store of value in India," Jain. End

 

US$1 = 83.73 rupees

 

Reported by Sandeep Sinha

Edited by Namrata Rao

 

 

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