Demand for gold in India fell 36 per cent year-on-year to 101.9 tonnes in January-March due to economic uncertainties and nationwide lockdown amid the covid-19 pandemic. According to the World Gold Council’s Gold Demand Trends report on Thursday, the demand value of the yellow metal fell 20 per cent to Rs 37,580 crore during the quarter.Gold jewellery demand in India fell 41 per cent during the March quarter to an 11-year low of 73.9 tonnes amid higher domestic prices, a depreciating currency and softer economic growth. Although demand rose during the wedding season early in the quarter, a sharp increase in local gold prices from mid-February made buyers hold back purchases. As the lockdown came into effect later in the quarter, demand slumped 60-80% in March.
World Gold Council expects gold demand to worsen in April-June as lockdowns remains in place until May, at least. ‘This will impact gold demand during the key buying festival of Akshaya Tritiya, as well as wedding-related purchases. Although some branded retailers have reported increased interest in their online platforms, logistical issues imposed by lockdown measures have made it difficult to fulfil the orders they generate,’ said World Gold Council.
Average gold price in India was at Rs 41,124 per 10 gram in January-March, 26.6 per cent higher year-on-year. A weaker rupee, combined with a rising dollar gold price, pushed local gold price to an all-time high of Rs 44,315 per 10g in March. China’s Q1 jewellery demand slipped to its lowest in more than 13 years, down 65 per cent YoY to 64 tonnes due to covid-19 outbreak.
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Globally, total gold demand grew marginally to 1,083.8 tonnes, up 1 per cent year-on-year as covid-19 outbreak, which swept the globe during the first quarter, was the single biggest factor influencing gold demand.