New Delhi (IANS) - Demand for gold in India went up by 15% in January-March 2017 year-on-year, even as global demand declined 18%, according to the latest report by World Gold Council. Demand for gold in India during Q1 2017 was at 123.5 tonnes against the 107.3 tonnes in Q1 2016. Global gold demand in Q1 2017 was 1,034 tonne, a decline of 18% compared to the record Q1 in 2016.
India's Q1 2017 gold demand value was Rs 32,420 crore, a rise of 18% in comparison with Q1 2016 (Rs 27,540 crore), the report stated. "Demand in Q1 2017 is up 15%, though this is against the low base of Q1 2016 that was impacted by the trade strike on the excise duty introduction. It signals both a return of optimism and the resilience of this industry that has been living with some tough challenges since 2013," said Somasundaram PR, Managing Director, India, World Gold Council.
Regarding global demand, Alistair Hewitt, Head of Market Intelligence at the World Gold Council said: "Demand is down year-on-year, but that is largely because Q1 last year was exceptionally high. Although we did not see the record-breaking surges in ETF inflows experienced in Q1 2016, we have seen good inflows nonetheless this quarter, with strong interest from European investors ahead of the Dutch and French elections." Total jewellery demand in India for Q1 2017 was up by 16% at 92.3 tonne as compared to Q1 2016 (79.8 tonne). The value of jewellery demand was Rs 24,220 crore, a rise of 18% from Q1 2016 (Rs 20,484 crore).
Total investment demand for Q1 2017 was up by 14% at 31.2 tonne in comparison with Q1 2016 (27.5 tonne). "The rupee appreciation significantly protected Indian households from the hike in dollar prices, giving them an additional reason to meet the latent gold demand that was created in 2016, following demonetisation and other regulatory measures against unaccounted wealth," he said.
Wedding demand that accounts for 40-50% of jewellery and bars and coins demand were strong in the first quarter.
"Opportunistic purchasing by investors and an increase in restocking, means the gold market is likely to maintain a healthy uptake for H1 2017. The forecast for normal monsoons could also play a promising role in stabilising consumer demand in H2 2017," Somasundaram added.
He, however, mentioned that there are concerns in the industry about transitioning to the Goods and Services Tax (GST) that will be introduced from July 2017.
The World Gold Council has predicted a demand of 650-750 tonnes in India in 2017.