Demand for Indian gold jewellery declined 74% to 44 tonne in the second quarter of 2020 due to the nationwide lockdown, lost festival demand and higher prices, according to the latest report from the World Gold Council (WGC).
The value of jewellery demand in Q2 was Rs 18,350 crore, down 63% from Rs 49,380 crore in Q2 of 2019.
India is the second-largest consumer of gold in the world after China.
The market development organization for the gold industry said H1 demand for jewellery was down 60% to an all-time low of 117.8 tonne.
Akshaya Tritiya, one of the most auspicious days for buying gold in India, was very timid this year as the country was going through strict lockdown.
According to the half-yearly report, discretionary spending on gold jewellery shrank due to concerns over economic growth, future income and higher prices. The average domestic price for Q2 was Rs 46,381 per 10gm, 44% higher Y-o-Y.
Sriram Iyer, senior research analyst at Reliance Securities, expects the demand to remain weak in the next couple of quarters. “Covid-19 crisis is still in progress and the Indian economy will take some time to emerge from the crisis. We would also like to see a proper correction in domestic prices so that the demand could recover,” he said.
Total gold demand in India, which includes jewellery and investment demand, for the first half of 2020 is seen at 165.6 tonne, which is 56% lower than the year-ago period.
Globally, the total demand for gold for the first half year was 6% lower at 2,076 tonne.
