Gold Looks Ripe for Remarkable Surge in Rural Demand

SEATTLE (Scrap Monster): The experts who participated in the panel discussion ‘Rural Markets and Gold’, organized by Free Press Journal, indicated that gold looks ripe for a surge in demand from rural areas. The gold prices managed to record new highs even during the pandemic crisis, at a time when other commodities registered sharp declines, it noted.

Speaking at the webinar, PR Somasundaram, MD-India, World Gold Council noted that other industries should look at gold to understand the technique of penetration into rural markets. Incidentally, rural market accounts for nearly 60-65% of the gold’s total demand in the country. The rural markets will integrate fast and will emerge as a key buyer of gold, he added.

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Meantime, Nagendra Kumar, Chief Business Officer, NSE observed that the comparatively better monsoon this year should boost gold buying in rural areas. As per estimates, every 1% rise in monsoon rainfall above the long-term average leads to 0.5% increase in gold demand. As of today, the country has received 7% excess monsoon rainfall, he reminded.

The webinar noted that the investor confidence in gold as an asset class is at an all-time high, despite recent surge in prices. This should translate to increased purchases of gold during the post-Covid-19 period, especially by rural customers. Gold’s rising appeal as a hedge against inflation should drive demand, it said.