Economy

Drop in price boosts demand for gold in March quarter

Our Bureau Mumbai | Updated on May 02, 2019 Published on May 02, 2019

Representative image   -  Getty Images/iStockphoto

Purchases for weddings, festival too play a crucial role

Gold demand increased by 5 per cent in the January-March quarter to 159 tonnes, against 151 tonnes in the same period last year, largely due to drop in prices.

In value terms, gold demand was up 13 per cent at ₹47,010 crore (₹41,680 crore), according to Gold Demand Trend report released by the World Gold Council on Thursday.

Jewellery sector purchased 125 tonnes of gold worth ₹37,070 crore (against 119 tonnes valued at ₹32,790 crore).

Reserve Bank of India purchased 8 tonnes of gold in the March quarter taking its total reserves to 608 tonnes, though it is not known whether it bought gold to back sale of 20 tonnes through the sovereign gold bond scheme. Somasundaram PR, Managing Director (India), World Gold Council, said the increase in auspicious wedding days during the quarter was crucial for the rise in gold demand.

The stronger rupee also benefited investors, with demand for gold bars and coins rising by 4 per cent to 34 tonnes in the quarter.

Digital platforms

Despite a nascent trend, digital platforms for buying gold continue to become popular, as internet investment gold providers forge effective market partnerships with UPI platforms and offer investors the option of purchasing pure gold for as little as one rupee on their smartphone, he said.

“We are likely to see accelerated growth through digital platform as a regulatory framework evolves with jewellers’ tie-ups growing. This will enable the seamless transfer of digital gold holdings to acquire jewellery,” he said.

The demand in the June quarter is likely grow with the ensuing wedding season, Akshaya Tritiya festival and rising crop prices. The forecast of normal monsoon this year augurs well for the rural economy and gold. The gold demand for this year is expected to be about 750-850 tonnes, he said.

Published on May 02, 2019
This article is closed for comments.
Please Email the Editor