Ind-Ra Released Gold Outlook for FY22

SEATTLE (Scrap Monster): The India Ratings and Research (Ind-Ra) published its gold outlook for FY22. It upgraded the outlook for retail gold jewellery sector from stable-to-negative to stable. The momentum is expected to sustain, mainly driven by dip in gold prices and rebounding economic activity following Covid-19 breakdown.

The international gold prices had witnessed sharp rise, following the US Fed decision to maintain its accommodative monetary policy. The domestic prices in India too followed suit. This sent the gold prices to its highest level in August last year. However, the prices saw correction by almost 10% from its peak in Q3 FY21, which in turn boosted gold purchases. The festive-season and wedding demand for gold surged during the quarter.

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The retail gold jewellery sector is poised to witness robust growth, mainly on the back of economic recovery, robust demand from weddings and boosted rural segment sentiments. Ind-Ra expects the sector to record growth by 30-35% in FY22. Although, it predicts a V-shaped recovery in FY22, the overall sectoral demand is likely to be higher only by 5%-10%, compared to FY20.

According to the ratings agency, the roll out of vaccines will lead to improved market sentiments and thus boost purchases.