
MUMBAI: The country consumed an additional 802.8 tonne of gold in 2024, up 5% over the previous year, despite the yellow metal price rallying by over 22%. The demand is likely to keep pace this year as well and is likely print in between 700 and 800 tonne. This increase is despite a 4% drop in imports at 712.1 tonne in the year from 744 tonne in the previous year.
Meanwhile, following the tit-for-tat tariff wars between the US and China, gold futures rallied to a dizzying high of $2880 per ounce on the Chicago Mercantile Exchange on Tuesday. Following this domestic retail price for 24 karat gold rose to Rs 86,925 for 10 gram in Delhi on Wednesday.
According to the World Gold Council, the spike in demand was on the back of import duty cuts in July which pushed up retail demand, along with aggressive purchases by the central bank which snapped up 73 tonne, in the year compared to just 16 tonne in 2023.
The WGC said gold demand in the country in 2024 stood at 802.8 tonne, up 5% from 761 tonne in 2023 while the total demand in value went up by 31% to Rs 5,15,390 crore in 2024, compared to Rs 3,92,000 crore in 2023.
“We see gold demand rising between 700-800 tonne in 2025 as we expect jewellery demand to recover due to wedding-related purchases, provided there is some level of price stability," WGC India chief executive Sachin Jain said Wednesday.
According to the All-India Sarafa Association, gold prices extended the rally for the fifth straight session and rose Rs 500 to hit a fresh peak of Rs 85,800/10 gram in the national capital on Tuesday.
So far this year, gold has surged Rs 6,410 or 8.07% to Rs 85,800 per 10 grams from Rs 79,390 on January 1.According to the WGC gold demand trends report, during the December quarter demand was flat at 265.8 tonne, which is similar to 266.2 tonne in the same period of 2023.
Meanwhile, in 2024, the jewellery demand declined by 2% to 563.4 tonne in 2024, compared to 575.8 tonne in 2023.
"The total jewellery demand, in terms of volume, slipped 2% to 563.4 tonne in 2024, despite the gold price reaching multiple record highs, indicating the resilience of gold jewellery demand and highlights the effect of the duty cut as well as the stronger economic growth compared to many other markets," Jain said.
He said many consumers purchased gold jewellery in the late third quarter when the duty cut mitigated much of the recent price increase. Gold prices resumed their upward trend after the July duty cut, and a subsequent correction in November attracted investors seeking lower-priced purchases.
Nonetheless, Jain said, the value of gold demand in 2024 increased by 22%, illustrating the ongoing demand for gold and supported by the rise in gold prices throughout the year."Total gold investment went up by 29% in 2024 to 239.4 tonne-- the highest since 2013, compared to 185.2 tonne in 2023, reinforcing gold's status as a safe-haven asset,” the report said.
Gold recycling declined 2% to 114.3 tonne in 2024 from 117.1 tonne in 2023, while gold imports fell 4% to 712.1 tonne in 2024 from 744 tonne in 2023."There was consistent ETF demand throughout the year, and the Dhanteras and Diwali festivals in October/November stimulated buying in the final quarter.
This was further enhanced in major metropolitan cities by e-commerce platforms offering rapid delivery of small gold investment bars and coins," he noted. Further, he said, the Reserve Bank was a significant purchaser in 2024, acquiring 73 tonne, more than four times its gold purchases of 16 tonne in 2023.
Additionally, it is anticipated that the trend of robust gold investment demand will continue, with retail investors showing growing interest in gold ETFs, digital gold, and coins and bars, he added.