Gold in India: There was a huge decline in the demand for gold in the country during the July-September quarter this year. According to the latest report of the World Gold Council (WGC), the total demand for gold in terms of quantity declined by 16 percent to 209.4 tonnes, whereas it was 248.3 tonnes in the same period last year. This decrease was mainly due to reduced purchasing power by consumers due to high gold prices.
However, in value terms the demand increased from Rs 1,65,380 crore to Rs 2,03,240 crore, an increase of 23 percent. This simply means that even though people bought gold in less quantity, the total expenditure increased due to higher prices.
Why did the demand for gold decrease?
The biggest decline was seen in the demand for gold jewellery. It declined from 171.6 tonnes last year to only 117.7 tonnes in this quarter, i.e. a decline of about 31 percent. However, the total value of jewelery purchases remained stable at around Rs 1,14,270 crore as buyers adjusted their budgets according to the increased prices.
On the other hand, a tremendous jump was seen in the demand for gold as investment. In terms of quantity, it increased by 20 percent to 91.6 tonnes, while in terms of value it increased by 74 percent from Rs 51,080 crore to Rs 88,970 crore. According to Sachin Jain, India Regional CEO of WGC, these figures reflect the growing trend among Indian consumers to adopt gold as a long-term asset and safe investment.
ever increasing brightness
The average price of gold in India increased by 46 percent to Rs 97,074.9 per 10 grams in this quarter, compared to Rs 66,614.1 per 10 grams a year ago (which does not include import duty and GST). Internationally, gold prices also increased and stood at an average of $3,456.5 per ounce, which is much higher than last year.
Sachin Jain also said that the historic increase of 23 percent in value despite decline in volume reflects the changing economic condition of Indian consumers and rising per capita income. He said that due to rising prices in recent months, many consumers have made wedding related purchases in advance, due to which strong sales are expected in the coming fourth quarter.
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