Indias Gold Jewellery Demand Up 49% On Year In June Quarter

28 Jul 2022 , 12:21 PM

The World Gold Council or WGC noted in a latest update that robust wedding and festival sales helped boost Q2 jewellery demand in India to 140 tonnes (t). The 49% y-o-y increase in Q2 demand was largely due to a very weak Q2’21; nevertheless, demand in the most recent quarter was healthy from a longer-term perspective – 6% above the five-year quarterly average of 132t. Demand in H1 reached 234t – 6% higher y-o-y – as the weak first quarter offset Q2 strength. Sales for Akshaya Tritiya in May, together with wedding purchases during the traditional Q2 wedding season generated the growth in demand. The timely correction in the gold price from the April high also contributed to the positive picture. But despite healthy Q2 demand, the macroeconomic backdrop of a weaker currency, rising inflation and higher interest rates posed headwinds. Urban Indians have been the main driver of demand growth as economic activity in these areas has largely normalised to pre-pandemic levels. In contrast, rural consumers have been heavily impacted by rising inflation and higher interest rates on agricultural loans, meaning demand from this quarter has yet to recover fully from the impact of COVID. The outlook for the rest of the year is mixed. While festival and wedding demand should be a positive factor in Q4, demand will face challenges from a depreciating rupee, higher inflation and the higher import duty on gold.Powered by Capital Market – Live News