India’s gold demand in 2024 has hit all-time lowest according to a recent report by the World Gold Council, or WGC. The high rates of gold in India might suppress festive-season buying in the nation. Notably, consumer interest in gold purchases during the traditional peak season would likely be subdued given local gold prices had already touched an all-time high of ₹79,700 per 10 grams this year, WGC India CEO Sachin Jain said.
The WGC believes India will need around 700-750 tonnes of gold for 2024, at its weakest level since 2020 and coming from a 761 tonnes consumption seen last year. The buying typically peaks during the last quarter Diwali and Dussehra being prime festivals when one buys jewellery because purchases of gold then are considered more auspicious.
But this year, according to Jain, most consumers have advanced their gold purchases to August following the sharp decline in local prices due to the government slashing of import duties by nine percentage points in July.
The seasonally rising gold prices that had surged by 26 per cent this year after an earlier gain of 10 per cent within 2023 has affected the demand significantly. Consumers would “wait for stabilization,” according to Jain, in the sense that there is likely to be relatively below-average volume-based demand going into the festival season.
Despite India’s low gold demand in 2024 thoroughly, some states see varying results
Even with that lower prediction, India’s gold demand in 2024, according to other sources, showed some resilience in many regions. According to WGC, Indian gold use increased by 18% to 248.3 tons during July-September, outpacing investment which surged by 41% and jewellery demand which increased by 10%. Meanwhile, gold-backed Exchange-traded Funds in India also showed unbroken growth, its holdings for September reaching 52.6 tons from 43.3 tons in January.
With the decline in Indian stocks, the downtrend may intensify with a 7% pullback in the NSE Nifty 50 index from its September highs. Consumers might look for safe assets in this scenario, and it will enhance the investment in gold. WGC will also continue to attract interest through gold ETFs, while investors will be looking at stable investments in the volatile markets.
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