Indian jewellery demand up by 5%

Fall in local gold prices

Triggered Q1 gold demand

Recently World Gold Council addressed India Gold Demand Statistics for Q1 2019 (January – March) in Mumbai. Somasundaram PR, Managing Director, India, World Gold Council said: “The strengthening of the rupee and the fall in local gold prices towards the later part of the quarter triggered a rise in India’s gold demand by 5% in Q1 2019 to 159 tonnes.

Growth of 5% in Indian jewellery demand to 125.4 tonnes uplifted global demand and boosted retail sentiment. The increase in auspicious wedding days in Q1 2019 - three times as many as those in the first quarter in 2018 - was also crucial to the rise in gold demand. The stronger rupee also benefited investors, with demand for gold bars and coins rising by 4% to 33.6t in the first quarter.

While yet a nascent trend, digital platforms for buying gold continue to become popular, as internet investment gold providers forge effective market partnerships with UPI platforms and offer investors the option of purchasing pure gold for as little as one rupee on their smartphone. We are likely to see accelerated growth as a regulatory framework evolves and jewellers’ tie-ups grow, enabling the seamless transfer of digital gold holdings to acquire jewellery.

Looking ahead, demand is likely to be boosted in Q2, due to traditional wedding season buying, the Akshaya Tritiya festival and rising crop prices. In addition to that, IMD has forecast that the monsoon will be normal this year which augurs well for the rural economy and gold. We estimate India’s gold demand to be positively impacted in 2019 and be in the range of 750 to 850 tonnes in 2019.”

Key summarised high lights are:

1:  Demand for gold in India for Q1 2019 was at 159 tonnes up by 5% as compared to overall Q1 demand for 2018 (151.5 tonnes) o India’s Q1 2019 gold demand value was Rs 47,010 crores, a rise of 13% in comparison with Q1 2018 (Rs 41,680 crores).

2: Total Jewellery demand in India for Q1 2019 was up by 5% at 125.4 tonnes as compared to Q1 2018 (119.2 tonnes) o The value of Jewellery demand was Rs 37,070 crores, a rise of 13% from Q1 2018 (Rs. 32,790 crore).

3: Total Investment demand for Q1 2019 was up by 4% at 33.6 tonnes in comparison with Q1 2018 (32.3 tonnes) o In value terms, gold Investment demand was Rs. 9,940 crores, a rise of 12% from Q1 2018 (Rs. 8,890 crores).

4: Total gold recycled in India in Q1 2019 was 16.1 tonnes, as compared to 14.1 tonnes in Q1 2018, a rise of 14% as compared to Q1 2018.

For year 2018, full year gold demand expectations for India are in the range of 750 to 850 tonnes!

Indian gold demand for the period January to March 2019 vs. the corresponding period in 2018: