Gold demand zooms 27% in Q3

New Delhi: After declining for two straight quarters, gold demand made a strong recovery in the third quarter, surging 27% during July-September, as an appetite for investment in the yellow metal returned and jewellers stocked up for the festive season. 

    Latest data released by the World Gold Council, the agency promoting sales of the yellow metal globally, showed that demand for gold went up to to Rs 65,373 crore, even as global sales fell 14% due to depressed economic sentiment in various countries, including China where demand dipped 8%. A part of the jump in sales in India was on account of a sharp depreciation of the rupee but in volume terms too there was an increase of 9%. Global sales were, however, 11% lower at 1,085 tonnes with India accounting for one-fifth share with total sales estimated at 223 tonnes. 
    The spurt in price as well as customs duty levied by the government had dampened the demand for gold, a favoured savings instruments for most Indian households. But in the September quarter, consumers seemed to have gone back to purchasing gold after postponing their buying decision due to high prices. While gold jewellery demand in India picked up 25% due to restocking by retailers ahead of the wedding season, investment demand, which fell 37% during April-June, registered a 27% rise too. Gold prices have almost doubled in the last three years and increased 14% in the last one year, causing buyers to be cautious about purchases. "In India, the price effect wears off over time and gold demand remains largely inelastic. We will once again set a new consumption record in the following year once we get used to the new price benchmarks," said Jayant Manglik, president, retail distribution at Religare Securities. 
    While retailers witnessed significant dip in purchases in the previous quarters, the period between Dussehra and Diwali turned out to be positive with sales value rising 30-35% as compared to the precious quarter.