Commodities

Gold demand up 19% as Covid curbs ease

Our Bureau Mumbai | Updated on July 29, 2021

Demand in the first half of this year plunged to a multi-year low of 216 tonnes, says WGC

Gold demand in the June quarter was up 19 per cent at 76 tonnes against 64 tonnes logged in the same period last year, largely due to the pent-up demand post the easing of localised lockdown.

Jewellery demand increased 25 per cent to 55 tonnes (44 tonnes) on the back of low base and purchases for weddings. However, it is the second lowest in the last 10 quarters.

In value terms, overall demand jumped 19 per cent to ₹32,810 crore ($4.4 billion), while that of jewellery rose 29 per cent to ₹23,750 crore ($3.2 billion). Gold prices in the quarter under review was up three per cent at ₹43,077 (₹41,734) per 10 grams.

Demand in the first half of this year plunged to a multi-year low of 216 tonnes amid lingering Covid crisis.

Gold imports in June quarter increased multi-fold to 121 tonnes against just 13 tonnes in the peak of Covid pandemic in the same period last year. However, imports are much lower compared to 310 tonnes shipped in March quarter. Recycling was also up 43 per cent at 20 tonnes (14 tonnes) as people gave up their jewellery to meet their urgent needs amid the pandemic.

Muted demand

Somasundaram PR, CEO (India), World Gold Council, said unlike last year, most of the jewellers are more prepared and have learnt to operate within the Covid restrictions to register better business performance. However, the demand for wedding and Akshaya Tritiya was muted in the June quarter, he said.

Digital solutions and easing of Covid restrictions in select States helped jewellery demand as prices softened. Interestingly, imports surged to 120 tonnes in anticipation of pick up in fabrication, he added.

The outlook for the second half of this year appears to be uncertain and would depend on pace of economic recovery, business responses and consumer confidence, said Somasundaram.

The forthcoming Dhanteras and more number of wedding days in December quarter than last year should spur demand as the pace of vaccination increases and people learn to live in post-Covid world, he added.

Published on July 29, 2021

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