Gold demand in Q2 beats pre-Covid levels

India’s gold demand grew at a higher-than-anticipated pace of 14% in the September quarter from a year before to 191.7 tonne, despite a hike in the import duty on the precious metal to 15% from 10.75% in July. Elevated consumption during the September quarter drove the demand beyond the pre-Covid level. According to the data released by the World Gold Council on Tuesday, demand, in value terms, grew even at a faster pace of 19% to Rs 85,010 crore in the July-September period, thanks to a rise in prices from the year earlier.

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Interestingly, jewellery demand in the July-September period rose 17% to 146.2 tonne, against a 6% increase in investment demand to 45.4 tonne. Recovery in gold jewellery demand was primarily driven by urban India, more specifically Southern parts, underpinned by robust economic activities, said Somasundaram. Rural demand however, was impacted by seasonal effect (monsoon) and inflation, he added.

On the other hand, Indian bar and coin demand also saw a 6% y-o-y improvement to 45.4 tonne as retail investors responded to gold price drop in recent months, weaker equity markets and festivities, Somasundaram added.