Comments
India's gold demand increased by 15 per cent during the first quarter of 2017 to 123.5 tonnes, signalling a return of optimism in the industry.
According to World Gold Council (WGC), total gold demand in the country stood at 107.3 tonnes in the January-March of 2016, impacted by jewellers’ strike over introduction of excise duty.
In value, gold demand grew 18 per cent in Q1 2017 to Rs 32,420 crore against Rs 27,540 crore in Q1 2016, according to the WGC’s ‘Q1 Gold Demand Trends’ report.
“Demand in Q1 2017 was up 15 per cent, though this is against the low base of Q1 2016 that was impacted by jewellers’ strike on excise duty introduction. It signals both a return of optimism and the resilience of this industry that has been living with some tough challenges since 2013,” WGC Managing Director, India, Somasundaram PR told PTI here.
He said rupee's appreciation protected Indian households from the hike in dollar prices, giving them an additional reason to meet the gold demand that was created in 2016, following demonetisation and other regulatory measures against unaccounted wealth.
Total jewellery demand was up by 16 per cent at 92.3 tonnes in the fist quarter of 2017 compared with 79.8 tonnes in the same period last year.
In terms of value, jewellery demand was Rs 24,220 crore, a rise of 18 per cent from Rs 20,484 crore Q1 2016.
Total investment demand for the period was up by 14 per cent at 31.2 tonnes against 27.5 tonnes in the same period of 2016.
In value terms, gold investment demand rose 16 per cent to Rs 8,200 crore from Rs 7,050 crore in Q1 2016.
Recycling went up by 3 per cent in Q1 2017 to 14.5 tonnes compared with 14 tonnes in Q1 2016.
Total imports during January-March quarter rose 112 per cent to 270.1 tonnes from 127.4 tonnes in Q1 2016.
“Wedding demand that accounts for 40-50 per cent of jewellery, bars and coins, was strong in the first quarter. Opportunistic purchasing by investors and an increase in restocking means the gold market is likely to maintain a healthy uptake for the first half of 2017. The forecast for normal monsoon could also play a role in stabilising consumer demand in the second half of the year,” Somasundaram added.
The combination of the wedding season, Akshaya Tritiya festival and continued remonetisation of India’s economy should support gold jewellery demand, he said.
WGC maintains its full-year demand forecast at 650-750 tonnes considering the short-term challenges arising from the PAN card registration, restrictions on cash transactions and the introduction of Goods and Services Tax (GST), he said.
“There are concerns about transitioning to GST that will be introduced from July 2017. Though the introduction of GST is widely welcomed by organised players, there are concerns about the level of tax. GST, coupled with import duty, needs to be below the current level of 12 per cent,” he added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.