Top Commodities - India gold demand predictions 2015 : Gold demand in India crashed by a fourth in the quarter through June from a year before to 154.5 tonne — far lower than a 12% drop globally — as rural demand collapsed, according to the data released by the World Gold Council (WGC) on Thursday. In value terms, domestic gold demand plunged by 26% in the June quarter from a year before to R37,590 crore.
WGC managing director (India) Somasundaram P R said the latest drop in Indian demand was a result of a “buoyant stock market, a softening rural economy affected by heavy unseasonal rains in Q1 of 2015 which damaged crops and fewer auspicious days impacting wedding-related demand”.
In the first half of the calendar year, demand fell just 7% to 346.2 tonne, compared with 372 tonne in the corresponding period last year, thanks to a 15% spurt in demand in the first quarter of this year.
Jewellery demand fell 23% to 118 tonne and investment demand declined 30% to 36.5 tonne. In value terms, jewellery demand fell 24% to Rs 28,703 crore and investment demand dipped 31% to Rs 8,887.2 crore.
That a drop in rural disposable income hit domestic gold demand is also evident from the fact that while recycling of the precious metal plunged to an eight-year low globally in the first half of 2015, it went up 7% in India. The amount of recycled gold isn’t accounted for in demand by the WGC. Total gold recycled in India was 24 tonnes in the April-June period, compared with 22.5 tonne a year before.
While April witnessed good gold sales in the build-up to the Akshaya Tritiya, May was a dampener, Somasundaram told FE, terming the drop in demand in the last quarter a short-term phenomenon. Sales have again picked up in July due to a crash in prices, he added. While a possible interest rate hike by the US Federal Reserve has already been factored in by the market, the devaluation of the Yuan by China has resulted in increased uncertainties about the global economy, which would help gold, he added.
In a recent interview to FE, Somasundaram had said domestic demand may remain in the lower band of its forecast range of 900-1,000 tonne for 2015. On Thursday, the WGC retained the forecast and predicted that gold demand would rise significantly in the December quarter and overall annual demand would cross 841 tonnes in 2014.
“The upcoming wedding and festival season suggest healthy prospects for the jewellery market and we have seen a positive uptick in demand in the last few weeks as Indian consumers are taking advantage of the softening in the gold price. It is also important to remember that this country has a natural affinity with gold and its role within the household economy cannot be underestimated. Consumers are optimistic and most parts of India have also had good rains that will help the rural economy,” he said.
WGC managing director (India) Somasundaram P R said the latest drop in Indian demand was a result of a “buoyant stock market, a softening rural economy affected by heavy unseasonal rains in Q1 of 2015 which damaged crops and fewer auspicious days impacting wedding-related demand”.
In the first half of the calendar year, demand fell just 7% to 346.2 tonne, compared with 372 tonne in the corresponding period last year, thanks to a 15% spurt in demand in the first quarter of this year.
Jewellery demand fell 23% to 118 tonne and investment demand declined 30% to 36.5 tonne. In value terms, jewellery demand fell 24% to Rs 28,703 crore and investment demand dipped 31% to Rs 8,887.2 crore.
That a drop in rural disposable income hit domestic gold demand is also evident from the fact that while recycling of the precious metal plunged to an eight-year low globally in the first half of 2015, it went up 7% in India. The amount of recycled gold isn’t accounted for in demand by the WGC. Total gold recycled in India was 24 tonnes in the April-June period, compared with 22.5 tonne a year before.
While April witnessed good gold sales in the build-up to the Akshaya Tritiya, May was a dampener, Somasundaram told FE, terming the drop in demand in the last quarter a short-term phenomenon. Sales have again picked up in July due to a crash in prices, he added. While a possible interest rate hike by the US Federal Reserve has already been factored in by the market, the devaluation of the Yuan by China has resulted in increased uncertainties about the global economy, which would help gold, he added.
In a recent interview to FE, Somasundaram had said domestic demand may remain in the lower band of its forecast range of 900-1,000 tonne for 2015. On Thursday, the WGC retained the forecast and predicted that gold demand would rise significantly in the December quarter and overall annual demand would cross 841 tonnes in 2014.
“The upcoming wedding and festival season suggest healthy prospects for the jewellery market and we have seen a positive uptick in demand in the last few weeks as Indian consumers are taking advantage of the softening in the gold price. It is also important to remember that this country has a natural affinity with gold and its role within the household economy cannot be underestimated. Consumers are optimistic and most parts of India have also had good rains that will help the rural economy,” he said.
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