"This year's first-half has been a little challenging. The jewellery demand in terms of volume from January to June (first six months of 2014) as compared to the same period last year is lowered by 14 per cent. But this is a short-term trend," World Gold Council Director Jewellery for India Vipin Sharma told PTI in an exclusive interview.
"In the long run, we see that the fundamentals are very strong. Now that the festive season is starting and the wedding season setting in, we are looking at a demand figure in the region of 850 tonnes to 950 tonnes.
"We see a very solid and robust trend as far as long term demand and that of the year-as-a-whole is concerned. We are quite positive in terms of what to anticipate for the last quarter particularly," Sharma said.
He said that the wedding season constituted one of the biggest segments as 50 per cent of the total gold consumption occurred during that period.
According to Sharma, who is responsible for the strategic development of the World Gold Council's Jewellery division in India, short-term fluctuations were a common trend and depend on the economic reasons as well as on the sentiments of the consumers.
"Short-term fall is not new. It goes with the demand which sometimes shoots up, sometimes goes down. Last year in the April-May period we saw an unprecedented spurt in gold demand because of certain drop in prices. So we continue to see short term trends specific to economic reasons, sometimes to sentiments at consumer-level and how their anticipation how they foresee the prices," Sharma said.
Talking about the Indian gold market's future, the World Gold Council official sounded quite hopeful going by the trend in the last five years.
"India's love for gold is well known and commodities that historically associated with every celebrations in the country. We continue to see a very robust long term trend in India ...
"And in the last five years the total demand at an average it has been more than 800 tonnes per year which is large and significant quantity. So long term trends continues to be very healthy and robust," Sharma said.
"Going by the last five years' or 10 years' trend, prices have gone up significantly. Earlier the price was around Rs 5000-6000 per 10 gram and last one year it has been close to Rs 30,000. But the consumption volumes have not dropped," Sharma said.
In the very long term the surveys suggested it to be fairly steady. Consumers' attitude appeared to be a very healthy attribute. So the outlook is very steady long-term growth for the market," he said.
While comparing the country's gold market with that of China's, Sharma described India's as a large, consistent and steady consuming market while that of China's as a growing market attributed to its economic growth.
"Both are two biggest consuming markets in the world. I think put together they count for 55-56 per cent of the overall global demand. And both are large and culturally looking at their Asian affinity towards gold there are some underlying similar factors.
"The trajectory of growth in the last few years has been little different. India has been a large, consistent steady consuming market while China is a growing market which can be attributed to the economic growth, earning levels are concerned but at fundamental-level both as leading, large, substantial even at core attributes," Sharma explained.
Among other initiatives, the Council was looking at the youth as a segment in the global market and has started the LoveGold on the social media (Facebook and Twitter), he said.
"We are looking at the youth as a segment internationally. We have an initiative called LoveGold on the social media front looking at how gold can connect the youth in a very modern way," Sharma stated.
"Of course we continue to invest and are trying to understand consumers and how the trends are shaping up in India, China, the US and parts of Europe," he signed off.