As far as the gold import
bill is concerned, in the first half of CY20, it came down to $5.86 billion -- a level not seen since 2005. In the first half of 2005, the import was worth $7.7 billion.
Chirag Sheth, principal consultant, India and South Asia, Metal Focus, said: “Indian gold demand is likely to drop significantly in 2020 because of the impact of Covid-19 on the economy. We believe discretionary spending of high-value items, such as jewellery, is likely to be curtailed significantly.”
In the current scenario, jewellers are adopting different strategies to meet the challenges. Dipu Mehta, managing director, Orra, said: “The way we function as retailers has drastically changed. The biggest challenge is to manage the dynamism and quick response to opening and shutting of stores depending on the terms of Covid-19 containment. The second biggest challenge is to keep customers engaged when they are unsure of stepping out of their houses for shopping.”
Paper gold is already witnessing an increased market share since the imposition of the lockdown. Sovereign gold bonds, equivalent of 10.8 tonne of the yellow metal, have been issued since the beginning of April. These bonds don’t require equivalent stock of physical gold, and hence that much demand of physical gold is lost. Gold ETFs, equivalent of 4-5 tonne of physical gold, has been bought since April 1. ETFs require storing of physical gold.