Hyderabad, Aug 1 (Agency) The gold demand in India has declined by 7 per cent to Rs 158.1 tonnes in Q2, 2023 as compared to the corresponding period in the previous year even as the gold imports increased by 16 per cent during the quarter. This decline would be attributed to the prevailing record high rupee gold prices. The overall Q2 demand for 2022 stood at 170.7 tonnes, according to a gold demand trends report for Q2, 2023 from ( April- June) released virtually by the World Gold Council (WGC), on Tuesday.
In value terms, India’s demand value during the quarter was Rs 82,530 crore, an increase of 4 per cent as against Rs 79,270 crore in the same quarter in the previous year. However, the total Jewellery demand in the country during the quarter decreased by 8 per cent at 128.6 tonnes as compared to 140.3 tonnes during the corresponding quarter in the previous year. The value of Jewellery demand was Rs 67,120 crore, a rise of 3 per cent from Q2 2022 (Rs. 65,140 crore). Total Investment demand for the quarter decreased by 3 per cent at 29.5 tonnes in comparison with Q2 2022 (30.4 tonnes). In value terms, gold Investment demand was Rs. 15,410 crore, up by 9 per cent against the Q2 2022 (Rs. 14,140 crore). Total gold recycled in India in Q2 2023 was 37.6 tonnes, as compared to 23.3 tonnes in Q2 2022, an increase of 61 per cent. The total gold imports in the country during the second quarter in this financial year was 209 tonnes, as compared to 180.7 tonnes in the corresponding quarter in the previous year, an increase of 16 per cent. Speaking after unveiling the report, Somasundaram PR, Regional CEO, India, WGC said, “India’s gold demand in Q2 2023 dropped by 7 per cent to 158.1 tonnes in comparison to Q2 previous year demand of 170.7 tonnes. The demand for gold jewellery in India experienced a notable decline of 8 per cent y-o-y to 128.6 tonnes for Q2 2023.
This decline can be attributed to the prevailing record high rupee gold prices, which significantly impacted affordability and consumer sentiment. The demand for investment too dropped marginally by 3 per cent to 29.5 tonnes from 30.4 tonnes in Q2 2022. There was a brief but notable impact on gold demand following the knee jerk reaction to the ban of 2,000-rupee notes during the quarter, he said. While challenges related to high gold prices and inflation persisted, the supportive economic backdrop and consumer adaptability played a significant role in bolstering the market’s resilience, said Somasundaram. Gold recycling in India witnessed a sharp spike during the quarter, with an increase by 61 per cent to 37.6 tonnes compared to the previous year. Many consumers would have opted to book profits from historic high gold prices, he said. Looking ahead for the rest of the year, we remain cautious about gold demand as it faces uncertainties due to elevated local prices and slowdown in discretionary spending. However, the success of the monsoon season could bolster sentiment ahead of Diwali season and throw positive surprises. With H1 2023 demand at 271 tonnes, our estimate for full year gold demand is in the range of 650-750 tonnes in 2023, he added.