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India gold demand rises 30% in first half of 2021

India gold demand rises 30% in first half of 2021

29 Jul 2021

KOLKATA: Gold demand in India increased 30% in the first half of 2021 to 216.1 tonnes, from 165.8 tonnes a year ago, signalling that the deadly second wave of Covid-19 was less of a deterrent than the first wave of the pandemic which had led to a nationwide lockdown

“The second quarter of 2021 was marked by widespread regional lockdowns following the rise in Covid infections. Unlike the previous year, when a national lockdown took businesses by surprise, this quarter was relatively better as businesses were more prepared,” Somasundaram PR, regional CEO, India, World Gold Council, told ET.

According to a World Gold Council report released on Thursday, gold demand in India in the quarter to June was up 19.2% year-on-year to 76.1 tonnes while total jewellery demand increased 25% to 55.1 tonnes.

Total Investment demand increased 6% year-on-year during the quarter to 21 tonnes. Total gold recycled in India was 19.7 tonnes, as compared to 13.8 tonnes a year ago, an increase of 43%. Total gold imports in India surged 1,004% to 120.4 tonnes, from 10.9 tonnes in the year-ago period.

Somasundaram said smuggling of gold has come down drastically due to restricted international travelling and a strict vigil on the porous borders in the north-east. “However, once the situation normalises there will be a propensity of increase in smuggling of gold as people who have lost their livelihoods may try to resort to the grey route to earn some quick buck,” he said.

The outlook for the second half of 2021 is uncertain, though, as consumer confidence and business response are subject to the impact of a looming threat of third wave of Covid-19 and the pace of economic recovery, said Somasundaram. Dhanteras and the upcoming season which has more auspicious wedding days in the fourth quarter of the year, as compared to the previous year, appear to be positive for demand. For the gold investment segment, however, attractive equity markets and volatile gold prices are strong headwinds, he said.