FILE PHOTO: Liquid gold is poured to form gold dore bars at Newmont Mining's Carlin gold mine operation near Elko, Nevada, U.S., May 21, 2014. The dore bars contain approximately 90 percent gold, 8 percent silver and 2 percent trace material. REUTERS/Rick Wilking/File Photo
FILE PHOTO: Liquid gold is poured to form gold dore bars at Newmont Mining's Carlin gold mine operation near Elko, Nevada, U.S., May 21, 2014. The dore bars contain approximately 90 percent gold, 8 percent silver and 2 percent trace material. REUTERS/Rick Wilking/File Photo

Indian gold demand drops 36 pct in first quarter

By Xinhua Time of article published Apr 30, 2020

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Indian gold demand for the January-March quarter declined by 36 percent in volume terms to 102 tons while in value terms it declined by 20 percent and 22 percent in rupee and U.S dollar, respectively, a statement by World Gold Council said Thursday.

During the quarter under review, jewellery demand for gold in Asia's third-largest economy declined by 41 percent to 73.9 tons while investment demand declined by 17 percent to 28.1 tons, the statement said.

The drop in demand for the yellow metal was attributed to a combination of factors such as high and volatile prices, economic uncertainties and towards end of the quarter, severe logistical freeze following nationwide lockdown due to Covid-19.

However, total gold recycled in India in the quarter was 18.5 tons, as compared to 16.1 tons in the corresponding quarter last year, up 16 percent on year.

"Life-time high prices of gold expectedly increased recycling by 16 percent. Recycling and collateralised loans against gold may be expected to grow exponentially in the next few quarters as the immediate economic impact of the lockdown becomes evident and hopefully, fundamental reforms follow, easing business sentiment," said Somasundaram PR, Managing Director, India, World Gold Council.

In that scenario, it is possible that gold becomes a tool for revival of many small and medium enterprises and household fortunes, he said.

According to experts, the second-largest importer of gold globally could see a dent in demand due to rising scrap supplies that could halt the rally in gold prices, which was seen as a safe haven amid the Covid-19 crisis. However, India's trade deficit would stand reduce due to falling gold imports and also support the domestic currency.

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