India's April-June gold demand down 18% at 131 tonnes: WGC
11 August 2016
India's gold demand fell 18 per cent to 131 tonnes in the second quarter (April-June) this year amidst a spike in prices, government regulations and a jewellers' strike following the impost of a 1 per cent sales tax on jewellery, the World Gold Council said.
India's total gold demand stood at 159.8 tonnes in the corresponding quarter last year, the latest WGC Gold Demand Trends Q2 2016 report noted.
The country's gold demand in April-June 2016 also dropped 8.7 per cent in value terms to Rs35,500 crore against Rs38,890 crore in the corresponding quarter of 2015.
Overall import of gold into the country declined by 38 per cent in the first half of the year to 291 tonnes compared with 470 tonnes in the first half of 2015.
Reports quoting WGC official said India's gold demand remained suppressed beyond April and until 'Akshaya Tritiya', a day when Indians buy gold for an auspicious occasion, boosting sales for a brief period.
But that enthusiasm was short-lived as high prices and a regulatory push for transparency through PAN cards, tax collection at source and excise duty on jewellery, hit demand.
Total jewellery demand in India during April-June 2016 was down 20 per cent at 97.9 tonnes compared with 122.1 tonnes in the comparable quarter of 2015.
Value of jewellery sold also fell 10.8 per cent to Rs26,520 crore from Rs29,720 crore in the second quarter of 2015.
Total investment demand for the April-June quarter was down 12 per cent at 33.1 tonnes against 37.7 tonnes in similar quarter last year.
In value terms, gold investment demand was down 2.1 per cent at Rs8,980 crore, against Rs9,170 crore in Q2 of 2015.
The quantity of gold recycled also dropped to 23.8 tonnes during the quarter from 24.0 tonnes a year ago.
However, the regulatory push and tax impost seems to have instead helped unofficial channels, including smuggling, which in turn impacted sales in the organised sector, say WGC officials.
WGC is looking to the coming festival and marriage season starting in September for gold demand to increase and imports to pick up.