India’s Gold Demand Surges 8% Despite Price Hikes: World Gold Council
India’s gold demand has surged in the first quarter of the year, despite a noticeable increase in prices. According to data released by the World Gold Council (WGC) on Tuesday, India’s gold demand reached 136.6 tons in the January-March quarter, marking an 8% increase compared to the same period last year. This rise in demand is particularly significant as it comes amidst rising gold prices, indicating robust demand despite the cost.
The uptick in gold purchases is attributed to various factors, including higher incomes in a growing economy, according to market analysts. In terms of demand breakdown, the jewelry sector saw a 4% increase, with demand rising to 95.5 tonnes from 91.9 tonnes. Additionally, investment demand, including bars and coins, experienced a substantial growth of 19%, reaching 41.1 tonnes from 34.4 tonnes.
The value of India’s gold demand also saw a significant surge, rising by 20% to Rs 75,470 crore during the quarter compared to the same period last year. The increased demand was largely driven by investors considering gold as a safe-haven asset amidst escalating geopolitical tensions, such as those seen in the Middle East and the Russia-Ukraine conflict. Moreover, the Reserve Bank of India’s increased gold purchases, totaling 19 tonnes in the January-March quarter, further contributed to the overall demand surge. Despite these positive indicators, concerns remain regarding the impact of rising gold prices on consumption demand for jewelry, which could potentially dampen purchases in the future.
