Interestingly, in the first nine months of the year (January-September), India’s reported cumulative gold demand was down only marginally— by 5.3 per cent to 493 tonnes, compared with 523.9 tonnes during the same period last year.
Besides India, China also saw a decline in gold demand — of 25 per cent to 199.1 tones. The overall gold demand was supported mostly by institutional investors who buy exchange-traded product.
“Gold demand in India
declined by 32 per cent in the third quarter of the current calendar year, primarily due to a weak consumer sentiment and high prices. Despite a step-up in buying during Akshaya Tritiya in the second quarter, the absence of any major festivals, monsoon and intervening inauspicious period like pitru-paksha led to the muted gold demand in India
during the July-September quarter,” said Somasundaram PR, WGC’s managing director for India, while releasing the council’s Q3 Gold demand trend report today.
The WGC attributed the sharp decline in India’s gold demand to a generally low consumer confidence amid talks of an economic slowdown and lack of a secular trend in price movements.
India’s cumulative gold import declined by a massive 66 per cent to 80.5 tonnes during July-September 2019, against 236.8 tonnes in the same period last year. Import of unrefined or dore gold was down 90 per cent to just 6.7 tonnes. WGC attributed lower imports to an estimated 220 tonnes of imported gold lying in the system with nominated agencies, bullion dealers or jewellers.
Most Indian refineries have shut shop due to negative margins on processing of dore. There were many occasions when the gold price was trading at a massive discount of $15 per 10g.