MUMBAI: Rally in gold prices has dented its demand as consumers bought fewer jewellery, bars and coins in the first quarter of 2023. The demand for gold jewellery in the March quarter fell 17% to 78 tonnes in the quarter ended March this year, compared to 94 tonnes in the same quarter in the previous year, according to the latest data released by the World Gold Council (WGC).
A similar fall was witnessed in the investment demand for the yellow metal as investors bought 34.4 tonnes of gold bars and coins in the first quarter of this year compared to 41 tonnes of gold bars and coins in the same quarter of the previous year.
Industry stakeholders blame high prices for muted demand for precious metals. Gold prices have risen around 10% so far this year and touched a record high of Rs 61,490 per 10 gram last month. However, prices have cooled a little and gold is currently trading at around Rs 60,800 per 10 gram.
“In the context of the record high local gold price, it was unsurprising to see such lacklustre jewellery demand. Indian consumers are keenly aware of- and sensitive to - moves in the local gold price,” said a report by WGC. Global factors are pushing up the prices of gold, say experts.
In the past year, the world has seen the start of the war between Russia and Ukraine, monetary tightening due to steep hikes in interest rates by the US Federal Reserve and the collapse of banks in the US and Europe. Fears of a recession have fueled the safe-haven demand for gold. Prices are expected to rise further by the end of this driven by strong festive demand.
“We expect India gold demand to pick up by the last quarter of the current year as the festive season kicks in from October onwards while slowdown concerns in the global economy could also keep safe haven appeal intact in gold prices for the next year perspective,” Naveen Mathur, Director - Commodities and Currencies, Anand Rathi Shares and Stock Brokers told this newspaper.
Gold prices rise nearly 10% so far this year
Gold prices have risen nearly 10% so far this year and touched a record high of Rs 61,490 per 10 gram last month. However, prices have cooled a little and gold is currently trading around Rs 60,800 per 10 gram