According to the World Gold Council, India’s gold sales during the year’s last festival period may shine less brightly after a large increase in 2021, and buyers would not be racing to retailers this time around.
Demand for gold jewellery, coins, and bars traditionally surges in the world’s second-largest consumer from October to December, spurred by holidays such as Diwali, which begins next week, and the subsequent flurry of weddings. Jewellery sales nearly rose in the fourth quarter of last year, reviving demand after two grim years dominated by the pandemic.
Indians purchased a record 344 tonnes of gold over the period, and sales are unlikely to exceed that this year, according to PR Somasundaram, regional chief executive officer at the London-based organisation, in an interview with Bloomberg Television on Tuesday.
“We will definitely see better demand than the first half of the year, but it is not going to be as good as it was last year,” he said.“Inflation is a little high, but it is not perceived as something of a crisis here. So, therefore, gold is just seeing a seasonal uptick and there is no crisis push toward gold at this moment in time.”
Gold is frequently regarded as an inflation hedge, yet worldwide markets for the precious metal have been impacted more recently by the rising dollar, which has kept prices under control.
According to Somasundaram, Indian gold demand could reach 750 tonnes in 2022, not far from the 800 tonnes witnessed last year. Digital gold sales via apps or the web have also “caught the fancy of people,” he stated.