GJ Town India

  Demand largely driven by investment & wedding related purchases!   Sachin Jain, Regional CEO, India, World Gold Council said, “Buying gold is considered auspicious during Dhanteras, Diwali. From gold jewellery to gold bars, gold coins consumers plan at least a token purchase as a matter of tradition as gold buying is generally believed to herald good fortune, wealth and prosperity and that is visible in the sharp rise in gold buying historically witnessed on this day.   Despite gold prices touching record highs of Rs 79,000/10 grams, anecdotal feedback from Industry indicates a resurgence in gold buying due to various ongoing festivals, with demand largely driven by investment sentiment and wedding related purchases.  The retailers have also invested on new designs and innovative usage of technology to make daily wear, lighter jewellery considering heightened gold prices, to invite consumers to come into the stores. There is also an expectation of incre...

Import duty reduction in India, a catalyst for demand!   Recently Kavita Chacko, Research Head, India- World Gold Council wrote about India’s gold market update: Import duty reduction, a catalyst for demand! The significant cut in import duty on gold and the resultant decline in the landed cost of gold have been a shot in the arm for gold demand in the country. Anecdotal reports suggest that there has been strong buying interest from jewellery retailers as well as consumers since the duty reduction.  At the recently concluded India International Jewellery Show, manufacturers noted that there has been a substantial increase in order bookings from retailers, who are preparing for the festive and wedding season running through December.    In some cases, these orders have reached levels not seen in several years. Additionally, the trend of bar and coin buying remains strong, supported by consumers as well as jewellers who are capitalising on supportive gold prices ...

Embrace storytelling, symbolism & creative narratives to sell Make in India, Design in India-Create in India designer jewellery to the world   Part 2: In the session on Global & India Gold Demand Trends, Kavita Chacko, the Research Head for India at the World Gold Council (WGC), said, "2024 is likely to be a record year for mine production of gold; Jewellery demand in 2024 will be firm but vulnerable to gold prices.   Bar and coin investment likely to remain healthy, with high prices and geopolitics attracting attention. Central banks are likely to keep buying gold at an impressive rate. Global annual jewellery demand held steady in 2023 at around 2200 tonnes even in a very high price environment.    In 2023 Gold has benefitted from a) Highlighted geo-political risk; b) Consumer demand; and c) Central bank buying. Annual Gold demand in 2023 rose 4%, reaching an all-time high of 4,930 tonnes. Contribution of 2 sectors a) jewellery demand and b) central ...

Gold jewellery 7% & Gold demand up 10% in India   Somasundaram PR, Regional CEO, India, World Gold Council (WGC) said, “India’s gold demand of 210t in Q3 2023 was higher by 10% over Q3 2022 of 191.7t. Purchase of gold jewellery in India was up 7% y-o-y aided by softer gold prices and festive demand, more pronounced in South India.   Investment gold demand, that is bars and coins, jumped 20% to 54.5t from 45.4t in Q3 of the previous year. Price correction was a major factor that triggered the latent demand which we believe continues to be strong underpinned by strong positive economic sentiment mixed with uncertainties arising from a variety of factors such as fear of inflation, below-normal monsoon and global developments. Gold recycling in India recorded 19.3t, a 20% growth over last year, which is more due to low base of last year and perhaps some profit taking. We believe recycling will continue to grow as initiatives of organised players to increase recycling of jewell...

Gold price support over Rs 61K per 10 grammes   Right now our auspicious festive Gudi Padva, is just at latch and gold price trend is on rock! At the occasion Somasundaram PR, Regional CEO, India at World Gold Council (WGC) said, “This year Gudi Padwa is being celebrated even as gold prices are headed for historic highs in the domestic market.    As economic growth influences demand significantly and this gets reflected in gold purchases on such auspicious days, demand is poised for good growth in 2023. Price pressures could keep rural demand subdued. Urban buying and digital gold accumulations which permit flexible low-ticket sizes could be emerging stories during this festive season.”  In general WGC is not focussing much on gold price trend and gold price outlook. In the perspective Colin Shah, MD, Kama Jewelry expressed as an expert on gold prices hitting Rs 60,000/10gm level.  He said, “Gold prices have risen almost 7-8% in the past month.    ...

The myth regarding gold & what does the data tell us?   Recently ABC Bullion highlighted the myth & asked, does gold need the dollar to fall? One of the interesting myths regarding gold as an investment is one that suggests it only does well in periods the US dollar (USD) is falling. Indeed, some analysts go so far as to say that it’s the anti-dollar.   It’s of course worth noting briefly that up until 1971, US dollars were formally backed by gold, at a formal price of close to $35 per troy ounce (oz), meaning you could exchange USD $35 for an ounce of gold through the banking system.   This backing was brought to an end during the Nixon administration, and it has now been just over 50 years since the US abandoned the gold standard. Back to the myth regarding gold and its relationship with the USD, in simple terms, some believe that anytime the USD is going up in value, the gold price will be going down, and vice versa. A detailed examination of market hist...

Gold and crypto currencies, WGC report   Recently World Gold Council (WGC) published the report, Gold and crypto currencies: How gold’s role in a portfolio differs from cryptos. The recent rapid ascent of crypto currencies over the past year has captured the attention of investors.   Often, investments in cryptos are equated to investments in gold. Despite some apparent similarities, we believe that gold stands apart from crypto currencies, both fundamentally and practically. Our analysis demonstrates that gold, 1: is a tangible asset with a unique dual nature as an investment and consumer good, 2: is highly liquid and less volatile, 3: is a proven long-term strategic investment & 4: may mitigate the risks that cryptos could bring to portfolios. The report also highlights, gold’s role in a portfolio differs from cryptos. That said, 1: Gold and cryptos are fundamentally different, 2: The advent of blockchain and crypto currencies has catalysed innovation in the financia...

India jewellery demand down by 42% in 2020   Expected 2021 to go further normalcy returns and s teady course of reforms strengthen the industry India!   Implementation of mandatory hallmarking in June 2021   Key Highlights: 1: Gold demand full year January –December 2020, 2: The gold demand for the full-year 2020 is 446.4 tonnes compared to 690.4tonnes in 2019, 3: Total jewellery demand in India for 2020 was down by 42% at 315.9 tonnes as compared to 544.6 tonnes in 2019, 4: The value of jewellery demand in 2020 was Rs.133,260 crores, down by 22% from 2019(Rs. 171,790 crore) .   5: Total investment demand for 2020 was down by 11% at 130.4 tonnes in comparison to 145.8 tonnes in 2019 In value terms, gold investment demand was Rs. 55,020 crores, up by 20%from 2019(Rs. 45,980 crores),6: Total gold recycled in India in 2020 was 95.5 tonnes as compared to 119.5 tonne. Somasundaram PR, Managing Director, India, World Gold Council said:“India’s gold demand dropped b...

Gold ETF inflows continued, but at a significantly lower pace   Announcing October highlights World Gold Council (WGC) reports that the Gold-backed ETFs and similar products (gold ETFs) recorded their 11th consecutive month of net inflows during October, matching the record number of positive monthly flows set in April 2006.   Gold ETF holdings increased by 20.3 tonnes (t), +US$1.4bn or 0.6% of assets under management (AUM), during the month as the gold price moved mostly sideways, finishing slightly below US$1,900/oz. Net inflows of 1,022t (US$57.1bn) in 2020, so far, have driven global gold ETF holdings to a new all-time high of 3,899t (US$235bn in AUM). By furnishing monthly regional overview, WGC reported positive inflows continued during October, albeit the lowest monthly increase in 2020, as most risk assets, like stocks, were lower on the month. Nearly all the net inflows came from European funds which added 20.2t (US$1.4bn, 1.4% AUM).  North American funds add...

  Understanding the gold carry trade!   Gold deposit rates, a guidance paper are just published by the World Gold Council (WGC) is the market development organisation for the gold industry. WGC say, ‘we provide insights into the international gold markets, helping people to understand the wealth preservation qualities of gold and its role in meeting the social and environmental needs of society. Here is the choicest part; related parts would be carried here time to time.   It is hard to examine gold lease rates without first understanding the gold carry trade. The gold carry trade once played a significant role in the gold lending market and constituted a large part of the demand to borrow gold. However, as market conditions changed over the years, the risk of the trade increased while its profitability declined. This reduced demand for borrowed gold and may be one of the leading causes behind the decline in gold lease rates. Under the gold carry trade, a trader, typi...