At 2,972.1 tonnes year-to-date (YTD) demand for gold at the global level is 10 per cent below the corresponding period in 2019, suggests WGC's Gold Demand Trends report released Thursday. Demand at 892.3 tonnes in Q3CY20 dropped 19 per cent YoY and is the lowest quarterly total since Q3-2009 as consumers and investors continued to battle the effects of the Covid-19 pandemic.
As regards India, the demand for gold inQ3CY20 stood at 86.6 tonnes, down 30 per cent as compared to the same period in 2019 at 123.9 tonnes. Gold demand value stood at Rs 39,510 crore during the period under review, down 4 per cent as compared Rs 41,300 crore in Q3-2019, WGC data show.
“A sense of cautious optimism has returned among the trade stemming from the fact that society is gradually learning to live with Covid-19. However, as we are still reeling under the impact of the pandemic and fear of a second wave of infections without clear sight of many variables on consumer behaviour, volatile prices, or length of the disruptions, we will not be able to quantify the impact on the full-year gold demand in India
other than to say that demand could be multi-year low,” Somasundaram said.
Jewellery demand hit
Gold demand for jewellery at the global level slipped 29 per cent YoY to 333 tonnes in Q3CY20. During this period, India witnessed a massive fall of 48 per cent year-on-year (YoY) to 52.8 tonnes, as per WGC data.
“YTD jewellery demand totals just 904 tonnes, the weakest in our data series by some margin. This is 30 per cent weaker than the equivalent period of 2009 – the next lowest Q1-Q3 total and the time of the Global Financial Crisis (GFC) – when demand reached 1,291.7 tonnes,” WGC said.
Rising gold prices were another deterrent. Between January and end-September, the US-dollar gold prices jumped 25 per cent. As the local gold price breached Rs 50,000/10 gram mark – a major milestone for India – casual/impulsive purchases were curtailed in favour of need-based buying.
“The prohibitive price level also encouraged a shift to lighter-weight plain gold pieces. That apart, inauspicious periods of Pitru-Paksha and Adhik Maas discouraged Indians buying during September as both periods are considered by Hindus to be inauspicious for gold purchases,” WGC said.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.