The sharp fall in gold prices has led to demand increasing 15 per cent to 192 tonnes in the March quarter. In value terms, the demand was up 9 per cent at ₹46,731 crore, according to a World Gold Council report.

The jewellery sector accounted for the major chunk of the overall demand at 151 tonnes against 123 tonnes recorded in the same period last year, registering a growth of 22 per cent. However, investment in gold was down 11 per cent at ₹9,969 crore and volume-wise it dipped 6 per cent to 41 tonnes.

Gold prices in India were down 5 per cent to ₹24,378 per 10 grams while in dollar terms it dropped 6 per cent to $1,218 an ounce. Prices of the yellow metal in India have been hovering on the higher side due to a 10 per cent import duty and weak rupee against the dollar.

Low base Somasundaram PR, Managing Director (India), World Gold Council, said the increase in gold demand this quarter was back on a muted growth in the same period last year due to weak economic sentiments and curbs on gold imports.

“Of late, the government has eased restrictions on imports and sentiments are looking with the GDP forecast of 7.5 per cent,” he said.

Outlook Though there are concerns over weak monsoon, it will have large impact only in the northern and western markets leaving little impact on the southern states as it is not a busy agriculture season in these regions, he said.

The gold demand in India is expected to touch 900-1,000 tonnes in 2015, said Somasundaram.

China remained the world’s largest gold consumer though its gold demand fell 7 per cent to 273 tonnes in the March quarter.

Globally, the demand was down 1 per cent to 1,079.3 tonnes.

Considering the forecast of better economic growth, demand for gold in India will be marginally higher than China this year, he said.

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