Mumbai: India's gold demand has reached pre-pandemic levels and has witnessed an annual growth of 14 per cent during the July-September quarter at 191.7 tonnes mainly driven by strong consumer interest, according to a World Gold Council (WGC) report. According to the 'Gold Demand Trends Q3 2022' report by WGC, the total demand stood at 168 tonnes during the July-September quarter of 2021.
In value terms, gold demand grew by 19 per cent to Rs 85,010 crores during the third quarter of 2022, compared to Rs 71,630 crores in the corresponding period of 2021.
India's total gold demand in the third quarter of 2022 at 191.7 tonnes is a 14 per cent increase over last year, which reflects better-than-expected performance and strong consumer interest, helping year-to-date demand return to pre-COVID levels, Somasundaram PR, Regional CEO, India, World Gold Council said. Meanwhile, total jewellery demand in India during the third quarter increased by 17 per cent at 146.2 tonnes, compared to 125.1 tonnes in the same period last year.
Value-wise jewellery demand was up by 22 per cent at Rs 64,860 crore during the quarter under review, from Rs 53,330 crore in July-September 2021.
"Credit expansion added impetus to this demand, with bank loan growth touching a nine-year high by quarter-end. Recovery in gold jewellery demand was primarily driven by urban India, more specifically southern parts, underpinned by robust economic activities with a 17 per cent y-o-y increase in tonnage terms," Somasundaram noted.
However, he said, rural demand was impacted by seasonal effects (monsoons) and inflation and on the other hand, Indian bar and coin demand also saw a 6 per cent y-o-y improvement to 45.4 tonnes as retail investors responded to gold price drop and weaker equity markets, and festivities around Ganpati and Puja festivals after 2 years of COVID, saw a huge uplift in consumer sentiment.
"Looking ahead, Indian retail investment is likely to continue to benefit from safe-haven demand amid rising interest rates and a weakening rupee.
"There's optimism in the overall outlook for the rest of the year with weddings and Diwali demand in the fourth quarter, but it is unlikely to match last year's record-breaking performance. Our gold demand estimate for the full year is around 750-800 tonnes similar to last year," he added.