Commodities Buzz: Indian Jewellery Demand Should Receive Support From Continued Improvement In Consumer Confidence Says WGC

28 Jan 2022 , 03:56 PM

World Gold Council (WGC) noted that Indian gold jewellery demand almost doubled y-o-y in 2021, surging past pre-pandemic levels to reach a six-year high of 611t. Record quarterly demand of 265 tonnes (t) in Q4 set the seal on this remarkable annual performance. With the easing of lockdown restrictions from June onwards and continued successful roll out of the vaccination program, India’s economy recovered in H2 2021. This boosted consumer sentiment particularly in urban India as reflected in an increase in the Reserve Bank of India’s Consumer Confidence Index, which rose to 62.3 in November 2021. Rural demand was supported by normal monsoon rainfall, although crop loss due to floods in the Southern states of Kerala and Tamil Nadu impacted rural demand to a degree.

As the year ahead unfolds, jewellery demand in India should receive support from continued improvement in consumer confidence and income levels. But there are likely challenges too. COVID-19 remains a significant factor, the latest wave of the pandemic prompting renewed Uncertainty and fresh restrictions on the size of weddings and social gatherings, and this see weddings postponed from Q1 to later in the year. Likewise, the sharp release of pent-up demand in Q4 is less likely to be repeated to the same degree in 2022.

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