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Gold Demand Witnessed Modest Recovery in India During H2 2018

The world’s second largest gold consumer, India, reported robust domestic demand for gold in 2018, despite gold prices touching new highs. The second half of the year witnessed increased demand, when compared with H1.

According to Rahul Prithiani, director, CRISIL Research, the high gold prices resulted in lower demand for gold in the country. Both the investment demand as well as the demand for gold jewellery took a hit during H1 2018. However, demand improved marginally during the September quarter. The festive and marriage season demand lifted gold purchases during the second half of the year, Prithiani noted.

The international gold prices had recorded marginal increase by 1% in 2018. However, domestic gold prices in India rose sharply during the year, touching the highest level in past six years during the month of October this year. The surge in domestic gold prices was mainly on account of depreciation of the local currency. CRISIL Research noted that domestic prices witnessed a surge of 5.4%.

Meantime, latest monthly trade data published by the Gem & Jewellery Export Promotion Council (GJEPC) suggests that gold bar imports surged higher by nearly 67% during April to November this year. The exports of gold jewellery by the country during this period too witnessed significant surge during this period.