Indian jewellery demand fell 74% y-o-y to 44 tonnes (t) - the lowest quarterly total in WGC series. Demand for jewelery by worth declined by 63 per cent to Rs 18,350 crore, from Rs 49,380 crore in the identical interval of 2019.
Virus-related lockdowns in India since March-end shuttered businesses and left millions jobless.
The Covid-19 pandemic impacted the consumer sectors of the gold market in the first half of 2020, with total demand dropping by 6 per cent on a year-on-year basis to 2,076 tonne, according to the World Gold Council's latest "Gold Demand Trends" report. The global response to the pandemic by central banks and governments, in the form of rate cuts and massive liquidity injections, fuelled these record inflows, the report said. "Consumers are also more likely to bank in profits when gold is at a high price", Andrew Naylor, WGC head of ASEAN and public policy, told finews.asia ahead of the mid-year review.
The price is now a life-time high of over Rs 50,000 per 10 grams, a key milestone and response is naturally mixed with content investors and wary consumers and to put it in perspective, gold prices have risen by 60 per cent since January 2019 and 20 per cent since January 2020, income growth or expectation have not kept pace with this, Somasundaram said. This was led by a sharp fall in metals demand in India, which usually accounts for the bulk of gold demand from this sector, largely offset by a 27% rise in official coin fabrication. India's GDP growth has been on a downward trajectory since Q1 2019 and this was accentuated by the outbreak of COVID-19. Some reports suggest that as much as half of the global demand for silver is from industries. Gold prices in India have also rallied to record highs, damping demand. First half inflows surpassed the previous annual record from 2009 of 646 tonne and lifted global holdings to 3,621 tonne. Total gold recycled in India in Q2 2020 was 13.8 tonnes, down 64% compared to 37.9 tonnes in Q2 2019.
Kolkata: Gold demand in India may not recover significantly in the six months to December 2020 owing to increasing prices, after demand plummeted 56% year-on-year in the first half of the year to 165.6 tonnes, said the World Gold Council (WGC). "That also shows that when there is a window of opportunity, there is a latent demand", he said.
"Likewise, demand for gold used in industrial applications recorded a year-on-year decline of 16%, with losses across all the major segments". "Going by what we are seeing now, lockdowns are still continuing in many parts of the country and it will be a very, very challenging year". H1 jewellery demand halved to 572 tonne amid the global disruption caused by COVID-19 and in the face of high - and in some cases record - gold prices. This information is given in the report of the World Gold Council (WGC). "Demand in China dropped by 2% year-on-year, hit by the economic slowdown and high gold prices".