Indians’ Appetite for Gold Rises, Unstoppable

The World Gold Council (WGC) released gold demand trends for Q3CY14. While globally Q3 was a subdued quarter for gold (total demand eased by 2% with jewellery demand dipping -4%), India Gold demand in the quarter was fairly healthy, aided by better consumer confidence, early onset of the festive season and soft prices.

India gold jewellery demand (in volume terms) jumped 60% in Q3CY14 to 183 Tonnes and was the second highest Q3 on record. Y/Y growth seems higher on account of a benign base to some extent. Improved consumer confidence, early onset of the festival season (leading to surge in gold imports in Sep month) and benign prices led to healthy jewellery demand. WGC noted that demand for Q4CY14 is expected to be healthy but the September surge in imports is unlikely to be replicated.

Investment demand (bar and coin) however did not match the recovery in jewellery demand, declining -10% y/y in Q3CY14 (in tonnage terms). Demand continued to be adversely impacted by soft gold prices and government policies. WGC however noted that the appetite for investing in gold remains strong in India. Research by Nielsen on behalf of the WGC found that gold products are second only to bank fixed deposits on the list of investment products currently held by Indian investors. Gold ranked equally highly in a poll regarding future investment plans.

The Following Charts Shows the Gold Jewellery Demand Vs Investment Demand in India
India Jewellery Demand
India Gold Investment

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