An increase in demand for gold: 15 percent increase over the last 3 months
Posted on: 07/May/2017 2:35:32 PM
During the quarter January-March of this year, the demand for gold has gone up by 15 percent to 123.50 tons.
According to the World Gold Council, this increase is a signal that the industry of gold and jewellery is on the way back from stagnation to growth.
The managing Director of the World Gold Council in India, Mr. P. R. Somasundaram, explained that this industry has been facing some challenging periods from 2013. Additional Kalal Tax was imposed on gold in 2016. The gold and jewellery traders protested against this all over the country. This factor led to a fall in the demand for gold to 107.3 tons.
However, as compared to the above figure, the demand for gold this year has increased to 123.50 tons. In values, it has increased from Rs. 27540 Crores to Rs. 32420 Crores. Also, due to the demonetization announced in last November both money circulation and the demand for gold dropped,
Presently, money circulation has increased. As the marriage season is already in vogue, it has resulted in an increased demand for gold. The first quarter of 2017 (January-March) registered a 16 percent increase in the demand for gold for jewellery to 92.30 tons. As compared to this, the corresponding figures for the 1st quarter last year was 79.80 tons.
In this 1st quarter, of the basis for the gold demand for jewellery, it has grown by 18 percent - from Rs. 20484 Crores to Rs. 24220 Crores.
The demand for the total gold investment has gone up by 14 percent – from 27.5 tons to 31.20 tons. On value base, the growth is 16 percent from Rs, 7050 Crores to Rs. 8200 Crores.
During the period, the demand for recycling gold grew by 3 percent from 14 tons to 14.5 tons.
Gold import has gone up by 112 percent – from 127.40 tons to 270.10 tons.
While considering the total demand for gold, 40-50 percent of the demand is from the segment for marriage jewellery, gold bars, and gold coins.
The factors such appreciation of Indian Rupee and favourable forecast for a good monsoon are expected to increase the demand for gold.
However, there are some challenges as well to be faced – cash control measures, PAN card regulations, new GST, etc.
