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India's gold demand up 13% at 975 tonnes in 2013

February 18, 2014 13:01 IST

India's gold demand up 13% at 975 tonnes in 2013

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India's gold demand remained buoyant in 2013 and rose by 13 per cent to 975 tonnes compared to 2012, despite government putting in several restrictions to curb imports, according to a World Gold Council report.

Gold demand in the country was 864 tonnes during 2012, according to data given in WGC 'Gold Demand Trends 2013' report.

"India's gold demand was up 13 per cent in 2013, compared to 2012. Demand in the second half was lower because of the effect of the supply curbs introduced in that period, but, equally, it was due to households having met a large part of their annual gold requirements in the first half, using the price drop in April as a buying opportunity," WGC Managing Director India Somasundaram P R told PTI.

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Image: This file photographs shows a woman trying gold ornaments on the occasion of the Hindu festival of Dhanteras in Kolkata.
Photographs: Sucheta Das/Reuters

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The total jewellery demand in the country in 2013 was up by 11 per cent at 612.7 tonne valued at Rs 1,61,750.6 crore (Rs 1,617.5 billion) compared to 552 tonne valued at Rs 1,58,359.1 crore (Rs 1,583.59 billion) in 2012.

The total investment demand for 2013, was up by 16 per cent at 362.1 tonnes from 312.2 tonnes in 2012.

In value terms, gold investment demand rose by six per cent at Rs 95,460.8 crore (Rs 954.6 billion) against Rs 90,184.6 crore in 2012.

Recycled gold, however, declined by 10.79 per cent to 100.8 tonnes in 2013, compared to 113 tonnes in 2012.

The latter half of 2013, Somasundaram said, has seen intense grey market activity but its impact will be more visible and significant this year if the import curbs continue.

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Image: A sales assistant arranges gold necklaces at a store in Lianyungang, Jiangsu province.
Photographs: China Daily/Reuters

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Estimates of the extent of gold smuggling in India vary widely, market analysts have suggested it could have added between 20-30 tonnes per month, the report pointed out.

"However, our estimation, based on our own analysis of the market, is that these unofficial flows may be considerably higher. We have previously been on record with our estimate of between 150-200 for 2013, and we feel that the total for 2013, was closer to the top-end of this range," he said.

Talking about 2014, Somasundaram said the industry is not in a very happy situation but the year will be a come back for the precious metal.

"In India, even as the current scenario is not very good, I am positive about gold. I am confident that gold will play a significant role in the country's economy. In 2014, market estimation of gold demand is between 900-1,000 tonnes," he added.

 


Image: Valuer Eve Chong, demonstrates the valuation process for jewellery at a MoneyMax pawn shop outlet.
Photographs: Edgar Su/Reuters

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