Gold demand in India declined by 39 per cent during the first quarter of this year at 116.5 tonnes due to jewellers’ strike over re-introduction of excise duty that affected the wedding purchase segment, says a report.

According to the World Gold Council’s ‘Gold Demand Trends’ report, the total gold demand stood at 191.7 tonnes in the January-March quarter of 2015.

In terms of value, the demand fell by 36 per cent to ₹29,900 crore in the first quarter of 2016 from ₹46,730 crore in the year—ago period, it said.

“In first quarter of 2016, gold demand in India was down by 39 per cent at 116.5 tonnes compared to January-March period of 2015. The jewellers’ strike following the re-introduction of an excise duty, which left even wedding shoppers affected, was one major reason impacting demand,” WGC Managing Director, India, Somasundaram PR, told PTI here.

The sharp increase in the price of gold since the beginning of the year and an expectation of a cut in the customs duty on gold also led consumers to hold back purchases, he pointed out.

A new regulation mandating PAN card details for purchases above ₹2 lakh is also reported to have affected buying, he said.

“We believe this has caused a pent-up demand for gold and coupled with this, gold has outperformed all other asset classes since the beginning of the year,” he said.

The promised rural thrust in budget spends, favourable monsoon and the jewellery trade resuming after adapting to the new regulations are all favourable factors, which will led to demand returning to normal levels. The forecast of India’s full year demand is in the range of 850-950 tonnes, he said.

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