Gold demand in India went up by 13 per cent during Aril-June period of this year to 213.2 tonne mainly driven by attractive prices and more number of auspicious days, World Gold Council (WGC) said in a report.
The overall demand in the country had stood at 189.2 tonne during the second quarter of 2018, according to WGC's Q2 Gold Demand Trends report.
In value terms, gold demand was up 17 per cent during the second quarter at Rs 62,422 crore, compared to Rs 53,260 crore in the same quarter of 2018.
"India's gold demand in Q2 2019 grew by a healthy 13 per cent underpinned by robust trade promotions, a higher number of auspicious days and a positive consumer response to softer prices in April and May," WGC Managing Director, India, Somasundaram PR told PTI here.
Total jewellery demand for the second quarter of this year (April-June), increased by 12 per cent at 168.6 tonne compared to 149.9 tonne a year ago.
The value of jewellery demand was up 17 per cent at Rs 49,380 crore in the period under consideration, from Rs 42,200 crore last year.
Total investment demand for the quarter under review was at 44.5 tonne, up by 13 per cent in comparison to 39.3 tonne last year.
In value terms, gold investment demand in April-June this year was Rs 13,040 crore, up by 18 per cent from Rs 11,060 crore in the same period last year.
Total gold recycled in India grew by 18 per cent to 37.9 tonne, from 32 tonne in the same quarter of 2018.
"Significantly, bar and coin demand grew to a 5-year high in Q2. However, the price rise in June and an unfounded expectation of a import duty cut in the fiscal budget, brought demand to a virtual standstill when the quarter ended," Somasundaram said.
Overall, gold demand in India, in the first half of 2019, was 372.2 tonnes, 9 per cent higher than the same period last year, despite a slowing economic environment and restrictions on the movement of cash during the election season, he said.
Meanwhile, Somasundaram said, the Reserve Bank of India purchased 17.7 tonne gold compared to 8.1 tonne in 2018.
Talking about imports, he said that the shipments into the country will be lower as the supply is more than the demand.
"We have seen excess supply since Q1 of 2017. Imports is likely to be lower as organised players will be cautious. We believe that there will be destocking but the demand will not be affected. Recycling will continue to grow following higher gold prices," he added.
Akshaya Tritiya purchases along with favourable prices were two major factors driving up demand in first half of 2019, he pointed out.
"We do not expect the hike in customs duty to have a long term impact on gold in India, although it will have a dampening impact on demand in Q3. We continue to estimate India's full year gold demand to be in range of 750 to 850 tonnes in 2019," he added.
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