The demand for gold in the world rose by 1 per cent on-year while it fell by 36 per cent in the country.
Even as global gold demand rose in the quarter ending March, it fell significantly in India. The demand for gold in the world rose by 1 per cent on-year while it fell by 36 per cent in the country, according to the World Gold Council (WGC). The WGC has attributed the global surge in the demand of yellow metal to it being a safe-haven, whereas economic uncertainties and coronavirus-induced nationwide lockdown in India have been underlined as major reasons behind the dip in gold demand in India. Also, the jewellery demand and gold investment demand took a hit in the first quarter and the coming quarters are said to be challenging as well.0
“The largest jewellery market, India also saw a fall in jewellery demand by 41 per cent to an eleven-year low of 73.9 tonnes,” Sriram Iyer, Senior Research Analyst at Reliance Securities, told Financial Express Online. The gems and jewellery industry, majorly driven by gold, has even witnessed a shock on the export-front. It has seen a continuous decline in exports in all of the 11 months of FY20, with February 2020 being a major disappointment, said a recent report by Care Ratings. A 41 per cent on-year decline in cut and polished diamonds exports led to a cumulative exports fall of 19 per cent on-year for the overall gems and jewellery industry in February 2020, it added.
Meanwhile, the demand for gold in India plummeted soon after a survey of the World Gold Council revealed that 29% of the Indian retail investors who have never bought the gold in the past are open to purchasing it in the future. India is one of the largest markets for gold, and growing affluence is driving growth in demand. Gold has a central role in the country’s culture, considered a store of value, a symbol of wealth and status and a fundamental part of many rituals.