Gold demand in India dips 39% in Q1 2016

Gold demand in India dips 39% in Q1 2016

Gold demand in India dips 39% in Q1 2016
Demand for gold in India in the first quarter of 2016 fell 39% to 116.5 tonnes compared with 191.7 tonnes in Q1 2015.

 Gold demand in value terms in the country fell 36% to Rs 29,900 crore compared with Rs 46,730 crore in the same period last year.

 As far as total jewellery demand in the country is concerned, it declined 41% to 88.4 tonnes compared with 150.8 tonnes in Q1 2015.

Total investment demand for Q1 2016 was down by 31% at 28 tonnes compared with Q1 2015 (40.9 tonnes). In value terms, gold investment demand was Rs 7,198 crore, down 27.8 % from Q1 2015 (Rs 9,969 crore).

 Gold recycled in India in Q1 2016 was 14 tonnes, compared with 18 tonnes in Q1 2015, a drop of 22% against Q1 2015.

 “The jewellers’ strike following the re-introduction of an excise duty, which left even wedding shoppers affected, was one major reason impacting demand. The sharp increase in the price of gold since the beginning of the year and an expectation of a cut in the customs duty on gold also led consumers to hold back on purchases,” World Gold Council India managing director Somasundaram PR said.

 The promised rural thrust in budget spends, favourable monsoons and the jewellery trade back to work adapting to the new regulations are all favourable factors which will lead to demand returning to normal levels. Our forecast of India's full year demand is in the range of 850 and 950 tonnes, Somasundaram added.