WGC Says Gold Demand Fell 17 Per Cent In March Quarter On High Prices: Report

The World Gold Council (WGC) also said that the Indian gold demand is likely to remain subdued even during June and September quarters on record-high prices

Gold Prices hit a record high of Rs 61,845 ($757.38) per 10 grams on Thursday. 

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The World Gold Council (WGC) on Friday said that demand for gold in India fell 17 per cent in the March quarter, the lowest in the last 10 quarters, reported Reuters. The market development organisation for the gold industry also said that the Indian gold demand is likely to remain subdued even during June and September quarters on record-high prices.

According to the report, lower gold purchases in India could limit global price rallies as India is the world's second-biggest gold consumer. It notes that bullion is trading near all-time highs. Declining gold imports could narrow India's trade deficit. The fall in gold demand could also support the Rupee.

The WGC, according to Reuters, said that demand during the March quarter fell to 112.5 tonnes as both jewellery and investment demand dropped due to a rise in local prices. Gold Prices hit a record high of Rs 61,845 ($757.38) per 10 grams on Thursday. 
 
"Softness in demand would continue for the next two quarters. It could revive in the last quarter provided monsoon delivers good rainfall." Somasundaram PR, regional chief executive officer of WGC's Indian operations, told Reuters. 

He said noted that India recently celebrated Akshaya Tritiya, the second-biggest gold-buying festival after Dhanteras, but demand during the festival was modestly weaker than the last year. Higher gold prices have been prompting some people to sell their old jewellery and coins, leading to a jump in scrap supplies. 

According to data published by the WGC on Friday, in the March quarter, scrap supplies jumped 25 per cent from a year ago to 34.8 tonnes, the highest in ten quarters, the report said. 
 
India's gold demand in 2023 could be between 750 to 800 tonnes compared to 774.1 tonnes in 2022, Somasundaram added.

Higher food grain production and increased farmers' income are often linked to good monsoon rainfall. In India, rural areas, where jewellery has long been a traditional store of wealth, account for about two-thirds of the country's gold demand, the report noted. 

Gold price rose Rs 540 in Friday's early trade with 10 grams of the yellow metal (24-carat) trading at Rs 62,180, according to the GoodReturns. Silver price jumped Rs 300 with 1 kg of the precious metal selling at Rs 77,100.