New Delhi, August 1: Demand for gold in India for (April-June) Q2 2019 was at 213.2 tonnes up by 13 % as compared to overall Q2 demand for 2018, stated World Gold Council (WGC) adding that hiked customs duty on gold import will have g a dampening impact on Q3, particularly as gold prices have remained elevated.
However, global gold demand for the first half (H1) of 2019 hit a three-year high of 2,181.7 tonnes, boosted by record central bank buying.
Global gold demand was 1,123 tonnes in Q2, up 8 % year-on-year
India’s Q2 2019 gold demand value was Rs 62,422 crore, up by 17% as compared to Q2 2018 (Rs 53,260 crore), stated the WGC Gold Demand Trends Q2 2019 report.
Total jewellery demand in India for Q2 2019 increased by 12% at 168.6 tonnes as compared to Q2 2018 (149.9 tonnes). The value of jewellery demand was Rs 49,380 crore, up by 17% from Q2 2018 (Rs. 42,200 crore).
“India’s gold demand in Q2 2019 grew by a healthy 13 % underpinned by robust trade promotions, a higher number of auspicious days and a positive consumer response to softer prices in April and May. Significantly, bar and coin demand grew to a 5-year high in Q2. However, the price rise in June and an unfounded expectation of an import duty cut in the fiscal budget, brought demand to a virtual standstill when the quarter ended,” said Somasundaram PR, MD, India, WGC.
Total investment demand for Q2 2019 at 44.5 tonnes was up by 13 % in comparison to Q2 2018 (39.3 tonne). In value terms, gold investment demand in Q2 2019 was Rs. 13,040 crore, up by 18 % from Q2 2018 (Rs. 11,060 crore).
WGC India’s 2019 full year market expectations of gold demand is 750 – 850 tonnes.
“Overall, gold demand in India, in the first half of 2019, was 372.2 tonnes, 9% higher than H1 2018 despite a slowing economic environment and restrictions on the movement of cash during the election season. Akshaya Tritiya purchases along with favourable prices were two major factors driving up demand in first half of 2019,” he said.
The report stated: “A contributory factor to the subdued demand in June was an expectation among consumers that the Indian government would announce a reduction in customs duty on gold in its early July budget. As it transpired, these hopes were entirely unfounded: the duty on gold was raised by 2.5%. Although we do not expect this to have a long-term impact on gold demand in India, we do see it having a dampening impact on Q3, particularly as gold prices have remained elevated.”