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Gold demand in the June quarter was up 13 per cent at 213 tonnes against 189 tonnes logged in the same period last year amid volatile prices. In terms of value, it jumped 17 per cent to Rs 62,422 crore (Rs 53,260 crore).
Jewellery demand during the quarter under review jumped 12 per cent at 169 tonne (150 tonne) while in value terms it was up 17 per cent at Rs 49,380 crore (Rs 42,200 crore).
Gold prices
While gold prices were down at Rs 32,500 per 10 grams in April and May against Rs 33,500 logged in February, it suddenly jumped to a record high of Rs 34,006 per 10 grams towards the second half of June in line with global trend.
Demand plunged with the sharp jump in gold prices towards the second half of June. Discount offered on gold bars to jewellers hit $23 an ounce, a level not seen since 2016.
Gold imports increased 28 per cent to 274 tonnes (193 tonnes) on anticipation of higher demand, said the Gold Demand and Trend report released by World Gold Council. However, the slowing economic trend and restrictions on movement of cash were a drag on demand in April and May, it said.
Somasundaram PR, Managing Director (India), World Gold Council said the demand was boosted by robust trade promotions, a higher number of auspicious days and a positive consumer response to softer prices in April and May. Significantly, he said bar and coin demand grew to a 5-year high in June quarter.
However, the price rise in June and an unfounded expectation of an import duty cut in the fiscal budget, brought demand to a virtual standstill when the quarter ended, he added.
Related news:Cut import duty on gold, says gems/ jewellery sector
Overall, gold demand in India, in the first half of 2019 was 372 tonnes, nine per cent higher than last year despite a slowing economic environment and restrictions on the movement of cash during the election season, said Somasundaram.
Contrary to the industry demand, the Government had increased the import duty on gold to 12.5 per cent from 10 per cent, delivering a big to the struggling industry. "We do not expect the hike in customs duty to dampen demand in September quarter," he added.
Read more:Budget 2019: Gold import duty hiked to 12.5%
Naveen Mathur, Director (Commodities and Currencies), Anand Rathi Shares and Stock Brokers said gold demand in first at half of 2019 has hit a three year high of 2,181 tonnes, mainly due to central bankers from China, Russia, Turkey Poland and Kazakhstan. T
Gold prices have already hit an all-time high due government increasing import duty and rural demand is unlikely to revive due to weak monsoon. Going ahead, he said demand for the yellow metal will remain lackluster while prices may continue to rally due to Chinese and Russian central banks gold purchase to hedge trade and geopolitical risks, he said
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