Disruptions caused by the coronavirus pandemic, weak consumer sentiment, and high prices are widely the reasons attributed to the low gold demand.
There is zero documentation required and it takes less than 2 minutes to generate a policy.
India’s love for gold seems to have faded away in the second quarter of the current fiscal year. Gold demand in the country fell 30 per cent on-year from 123.9 tonnes to 86.6 tonnes in Q2 FY21, according to the World Gold Council (WGC). Disruptions caused by the coronavirus pandemic, weak consumer sentiment and high prices are widely the reasons attributed to the low demand. Though the demand is much below the previous year’s level, it has seen an improvement since the first quarter when the country was under a strict nationwide lockdown. In the first quarter, gold demand was at 64 tonnes, which was a 70 per cent drop and the second-lowest in the quarterly series.
The report highlighted that the total jewellery demand in India fell 48 per cent to 52.8 tonnes in Q2 FY21, compared to 101.6 tonnes in the same quarter last year. However, total investment demand during the second quarter surged by 52 per cent to 33.8 tonnes, compared to 22.3 tonnes in the same period of 2019. While the fall in gold demand is a worrying factor, it is also believed that gold buying in the July-September quarter is generally lower due to seasonal factors like monsoons and inauspicious periods like Pitru-Paksh and Adhik Maas. The absence of wedding dates and festivals also make the quarter less favourable to buy gold.
It is also to be noted that while China and India accounted for the largest volume declines, weakness was global, WSG said. Global gold demand fell 19 per cent during the July-September quarter to 892.3 tonnes, which was the lowest quarterly total since Q3 of 2009, World Gold Council (WGC) said in a report. The total global demand during July-September 2019 stood at 1,100.2 tonnes. It is interesting to note that even from the global perspective, there was significant growth in investment demand, the report said.