Diwali 2021: Demand For Gold Soars In India Due To Diwali, Dhanteras And Wedding Season

Diwali 2021: The demand for Gold in India is approaching the pre-COVID level and may see further rise. Demand for Gold surged after strengthening economic activity and improving consumer demand.

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New Delhi: Diwali, Dhanteras festivals and wedding season have led to a sharp rise in demand for Gold in India. India's gold demand rose 47 per cent to 139.1 tonnes on an annual basis in the July-September quarter. According to the World Gold Council (WGC), demand for gold has picked up after economic activity strengthened and consumer demand improved.

Demand for Gold reaches pre-COVID level

According to the WGC, the demand for Gold in India is once again coming to pre-COVID level and may see a further rise in the long run. The Gold Demand Trends 2021 report for the third quarter of the WGC states that the total demand in the country stood at 94.6 tonnes of Gold during the September quarter of 2020.

According to Somasundaram PR, India's regional CEO of the World Gold Council, with the rapid increase in vaccination and the falling Covid infection rate, success in controlling the pandemic seems to have been achieved, which has led to a return of economic activity. He said that there was not much import in the fourth quarter as the festive season stock had already arrived during the third quarter of 2021.

Demand expected to rise at festivals and weddings

Somasundaram said, with the gradual lifting of restrictions across the country, retail demand is coming back to pre-COVID levels. There is more enthusiasm towards the demand for Gold in the coming festive and wedding season.  He further said that the demand for Digital Gold has also increased manifold. New Technology Initiatives, the tie-up with Digital Gold and UPI platforms from leading jewelers has boosted online buying by customers and investors. 

According to the report, the total demand for jewellery in India increased 58 percent to 96.2 tonnes in the third quarter from 60.8 tonnes during the July-September quarter of 2020.  Total investment demand for the third quarter increased 27 percent to 42.9 tonnes, up from 33.8 tonnes in the same quarter in 2020. According to the report, Gold demand rose 19 percent to Rs 18,300 crore in July-September in value terms which were Rs 15,410 crore a year ago.