COVID-19 impact: India's gold demand falls by 30 per cent in Q3
Oct 29, 2020
Mumbai (Maharashtra) [India], October 29 : India's demand for gold for third quarter (July-September), 2020 has fallen by 30 per cent at 86.6 tonnes as compared to overall Q3 demand for 2019 at 123.9 tonnes, the World Gold Council (WGC) said here on Thursday.
According to the WGC report, gold demand value for the Q3 was at Rs 39,510 crores, down by 4 per cent as compared to Q3 2019 (Rs 41,300 crores).
"India's Q3 2020 gold demand fell by 30 per cent to 86.6 tonnes on the back of Covid related disruptions, bleak consumer sentiment and high prices accompanied by volatility. This is, however, higher than Q2 which at 64 tonnes was a 70 per cent drop and the second-lowest in our quarterly series. This has been partially due to the easing of lockdown and some low prices in August that provided a small window of buying opportunities for the discerning," said Somasundaram PR, Managing Director, India, WGC.
According to Somasundaram, Q3 tends to be relatively low generally due to seasonal factors like monsoons and inauspicious periods like Pitru-Paksh and Adhik Maas.
Jewellery demand for Q3 fell by 48 per cent to 52.8 tonnes as jewellery purchases did not have any support of festivals or weddings during this period.
"On the other hand, gold's safe-haven attributes and anticipation of price rise paved the way for an increase in investment demand for gold bars and coins by 51 per cent to 33.8 tonnes. One interesting development during these months of lockdown has been the rapid rise in digital engagement with several tech initiatives by top jewellers to woo buyers. Digital platforms selling allocated gold through wallets also recorded a sharp rise in volumes, along with significant activity in gold ETFs following a prolonged period of quiescence," Somasundaram has said.
Total jewellery demand in India for Q3 2020 decreased by 48 per cent at 52.8 tonnes as compared to Q3 2019 (101.6 tonnes). The value of jewellery demand was Rs 24,100 crores, down by 29 per cent from Q3 2019 (Rs 33,850 crores).
Total investment demand for Q3 2020 at 33.8 tonnes increased by 52 per cent in comparison to Q3 2019 (22.3 tonnes). In value terms, gold investment demand in Q3 2019 was Rs 15,410 crores, up by 107 per cent from Q3 2019 (Rs 7,450 crores).
The total gold recycled in India in Q3 2020 was 41.5 tonnes, up by 14 per cent compared to 36.5 tonnes in Q3 2019, according to WGC.
