World Gold Council Foresees Lacklustre Demand for Gold in India During Diwali

SEATTLE (Scrap Monster): The World Gold Council (WGC) has published its latest gold demand forecast for India during the upcoming festive season.

According to Somasundaram P.R, Managing Director, WGC-India, the duo of Covid-19 lockdowns and spiralling gold prices have resulted in huge drop in gold demand in the country during the second quarter this year. The demand for gold jewellery in the country has registered 74% dip in Q2. The investments in gold saw a decline by 56% during the quarter, he said.

ALSO READ: World Gold Council Predicts Higher Gold Price Volatility in the Near Term

The Akshaya Tritiya gold purchases remained at near-zero levels, on account of shutdown of retail outlets due to lockdown restrictions. The easing of lockdowns in certain regions has resulted in reopening of shops. However, the sky high gold prices continue to deter gold purchases. The prices, including taxes, have surged higher to hit the peak of almost INR 55,000 per 10 grams. WGC noted that consumers may take some time to get used to the new price band.

Going forward, the uncontrolled spread of Covid-19 may play a dampener on gold demand in the country during Diwali as well as the wedding season that follows it. If the pandemic woes persist, weddings may likely get postponed by another quarter, due to social distancing restrictions, which in turn signals of a muted demand for the yellow metal in the latter half of 2020, WGC said.