In its latest report, the World Gold Council (WGC) has said that demand for gold in India during the first three months of 2022 stood at 135.5 tons, marking a sharp year-on-year decline of 18%. The gold demand during the same period of 2021 was recorded at more than 165 tons. In terms of value, the gold demand during January-March 2022 period stood at Rs61,550 crore, a 12% drop as compared to Rs69,720 crore in the same period of last year. High prices of the gold metal are the likely to be the cause for this plunge in demand, the council has said.
While price without taxes of 10 grams gold in the first quarter of this year increased by 8% to Rs45,434 . The increase in prices this year are believed mainly to be due geopolitical tensions on a global levels. Currently, various factors like depreciation of the rupee and international pressure, are pushing the price of gold to nearly Rs50,000 per 10 grams. Thus, the demand is mostly for gold and gold items that weigh 10 grams or less.
India gold jewelry demand also saw a serious year-on-year drop of 26%, marking at 94 tons, as compared to 126.5 tons in 2021. In terms of value as well, jewelry demand dropped 20% to Rs42,800 crore during the period, from Rs53,200 crore in the previous year.
Nevertheless, purchase of gold as investment saw a boost, supported by rising prices and market volatility. Sale of primarily gold bars and coins increased 5% to 41 tons. In value terms, gold investment demand grew 13% year-on-year and stood at Rs18,750 crore.
According to WGC, this year overall demand for gold is estimated at 800-850 tons.