Demand for gold increased by 37% in India during the first quarter of the year 2021 compared to the same time period in 2020 as prices were lower and the countrywide vaccination drive boosted shopping.
Gold demand totalled 140 tonnes in the first quarter of 2021 compared to 102 tonnes during the first quarter of 2020, the World Gold Council reported in its latest ‘Gold Demand Trends’ report, accessed by the Gem and Jewellery Export Promotion Council. From January to March, 2021, India’s total gold jewellery demand increased by 39% at 102.5 tonnes as compared to the same time period in 2020 when it totalled 73.9 tonnes. The World Gold Council cited wedding purchases, declining gold prices, and a boost to customer sentiment as reasons for the increase.
“India’s Q1 2021 gold demand rose 37% to 140 tonnes on the back of Covid containment and positive sentiment following the start of the vaccination programme,” said the World Gold Council’s India managing director Somasundaram PR, the GJEPC reported. “It presented a glimpse of gold’s underlying strength of resurgence when we learn to live with a well and truly tamed Covid.”
“The average domestic gold price of Rs.47,131 per 10 grams was 14% higher year-on-year but 6% lower quarter-on-quarter and significantly, 16% lower than the August 2020 peak Rs.56,000 per 10 grams,” said Somasundaram PR. “[The] slide in prices below Rs.50,000 per 10 grams removed a psychological barrier for the consumers and spurred bargain buying and wedding-related accumulation, releasing pent-up demand.”
The World Gold Council however has a more cautious outlook on the second quarter of the year as lockdowns have halted retail businesses once again in many areas. Wedding demand has dipped as has consumer sentiment as many shoppers face uncertain finances once again.
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