Soaring prices no bar, demand for gold rises 8% in March quarter
Demand for gold bars, coins, and jewellery increased in March quarter. Total gold demand rose due to rising investment interest, positive inflows in gold ETFs, and strong macroeconomic support in India.
Kolkata: Demand for gold and coins, which are primarily bought as , rose 19% in the quarter ended March 31, at par with the first three months of 2022 when the growth was the strongest since 2014.sales increased 4% to 95 tonnes, taking the overall 8% higher from a year earlier to 136.6 tonnes, according to a report released by the World Gold Council () on Tuesday.
The WGC has kept India's full-year gold demand forecast at 700-800 tonnes. If the current price rally continues, sales could be at the lower end of this range.
"The price correction in February sparked investors' interest, with anticipation of a rebound driving purchases. As the price rallied to successive record highs, investors remained bullish, contributing to the robust demand," said Sachin Jain, regional chief executive-India at the WGC.
Millennials, in particular, are buying gold bars and coins for investment to grow their assets, he said.
In value terms, gold investment demand in the first quarter of 2024 was ₹22,720 crore, up 32% from a year earlier. Sales volume of gold bars and coins totalled 41 tonnes.
India recycled 38.3 tonnes of gold in the first quarter, up 10% from 34.8 tonnes in Q1 2023. It imported 179.4 tonnes of the yellow metal, up 25% compared with 143.4 tonnes a year earlier.
"India's continued strong macroeconomic environment was supportive for gold jewellery consumption even though reached a historic high in March, leading to a slowdown in sales as the quarter ended," Jain said.
Although Indian recycling volumes increased by 10%, there were very few reports of distress selling, the WGC said.
