India’s gold demand has seen a significant resurgence, with an 18 percent year-on-year increase during the July to September quarter of 2024. According to the World Gold Council (WGC), this uptick, reaching a total of 248.3 tonnes, is largely attributed to a reduction in gold import duties that has revitalized jewellery demand across the nation. This information was highlighted in the WGC’s Q3 2024 Gold Demand Trends report released on Wednesday.
Comparative Analysis of Demand Trends
In the same quarter last year, India’s gold demand was recorded at 210.2 tonnes. The year-on-year growth indicates not only a recovery but also an increasing consumer interest in gold as a precious commodity. However, while the demand figures are promising, the context of rising gold prices cannot be overlooked. Current gold prices are at all-time highs, leading to speculation that many investors may choose to hold off on purchases, anticipating possible price corrections in the near future.
Future Projections for Gold Demand
Looking ahead, the WGC projects that the overall gold demand for the full year will likely fall within the range of 700 to 750 tonnes. This forecast is slightly below the demand observed last year, which stood at 761 tonnes. Factors such as the upcoming Dhanteras festival and the wedding season are expected to contribute positively to overall gold consumption. These cultural events traditionally boost jewellery purchases, which may help counterbalance the impact of high prices on demand.
Recent Market Activity
On Tuesday, the gold price in the national capital surged by ₹300, reaching ₹81,400 per 10 grams. This increase is indicative of heightened activity in the market, particularly from jewellers and retailers preparing for the Dhanteras festival, a significant day for gold purchases in Indian culture. The sustained demand during this festive season is likely to influence market trends in the coming weeks.
Conclusion
The combination of reduced import duties and a cultural inclination toward gold purchases during significant festivals and wedding seasons is contributing to a notable rise in jewellery demand in India. While current market conditions are challenged by high prices, the anticipated events could provide a much-needed boost to the gold market, ensuring that demand remains robust despite fluctuations in pricing.
As the market evolves, stakeholders will be closely monitoring how these trends develop, particularly in light of global economic factors that may also impact gold prices and demand patterns in the future.
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