Mumbai: The demand for gold in India declined 17 per cent to 112.5 tonnes in January-March 2023 owing to higher volatility and an increase in gold prices.
The demand for the yellow metal is likely to be muted in 2023, the World Gold Council said in its Gold Demand Trends Report for the first quarter of calendar year 2023. The gold demand value in Q1 2023 was Rs 56,220 crore, down 9 per cent from Rs 61,540 crore in Q1 2022.
“In India, the demand (for gold) has been very soft. There is a 17 per cent drop (in Q1 2023) in the Indian demand for both jewellery and bars and coins. It is largely due to the very high price. On top of it, volatility in prices also affected,” said Somasundaram PR, Regional CEO, (India) World Gold Council.
At 112.5 tonnes, gold demand was lowest since 2016, barring 2020 when it had dropped to 44 tonnes in the April-June quarter on account of the lockdown. In 2016, the demand was 107 tonnes.
The record high and volatile gold prices affected sentiment and gold jewellery demand dropped to 78 tonnes from 94.2 tonnes in Q1 2022 with little support from the investment side, Somasundaram said.
In value terms, gold Investment demand in January-March 2023 was Rs 17,200 crore, down by 8 per cent from Rs 18,750 crore in Q1 2022.
Total gold recycled in India in Q1 2023 was 34.8 tonnes, up by 25 per cent compared to 27.8 tonnes in Q1 2022.
“Our forecast for the gold demand is muted for 2023 even as the economic momentum in India remains healthy and the RBI rate hike cycle has paused. We believe current trends point to less than 800 tonnes of demand for 2023,” Somasundaram said.
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He said the demand for gold for the rest of the calendar year will depend on prices and monsoon. “The fourth quarter generally tends to surprise,” he said.
Agencies

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