WGC Foresees Muted Gold Demand in India

SEATTLE (Scrap Monster): The Indian chapter of World Gold Council (WGC) foresees muted demand for gold in the country during the last quarter of 2018. The gold demand had surged higher by nearly 10% during the July-September quarter this year. The projected subdued demand is mainly on the back of lack of confidence on the part of investors due to weak fundamental support.

According to Somasundaram PR, Managing Director, India, WGC, the wedding season demand is likely to continue as usual. However, the purchase volumes may not be as big as the previous seasons. Though the Q4 gold demand is likely to surpass that of Q3 this year, it is unlikely to equal the demand witnessed during October-December quarter in 2017. It must be noted that the Indian gold demand had totaled 240 tonnes in Q4 ’17.

The high domestic gold prices have impacted gold purchases in the country. Despite low prices in international market, gold in India has been expensive, mainly on account of depreciating Indian currency. Meantime, the investment in digital gold witnessed significant jump during this festive season. Also, other asset classes including stock markets and bank fixed deposits reported increased investments.

The cumulative gold demand during the initial three quarters of 2018 totaled 524 tonnes, marginally lower by 1% when compared with the demand of 529 tonnes during the corresponding three quarters in 2017. The Council estimates the annual Indian gold demand at around 700 tonnes in 2018, marginally lower than 771 tonnes in 2017.