From July to September 2024, gold purchases in India reached 248.3 tonnes, marking a 51% increase compared to 165 tonnes bought by China during the same period. This data, released by the World Gold Council, highlights India’s growing appetite for gold, primarily in the form of coins and bars.
During this three-month period, India’s gold demand surged by 18% year-on-year. A significant factor contributing to this increase was the reduction of the import duty on gold from 15% to 6%, announced by Finance Minister Nirmala Sitharaman during her Union Budget speech on July 23. Additionally, the phenomenon of “revenge buying,” where consumers rush to purchase a commodity after a long period of restrictions, further fueled demand.
Sachin Jain, regional CEO (India) of the World Gold Council, noted that India’s gold demand remains robust heading into the fourth quarter, especially due to Dhanteras and wedding season purchases. He cautioned that while the duty cut could stimulate buying, rising gold prices might lead investors to hold off and wait for price corrections to add to their holdings.
In the July-September quarter, Indian consumers bought 77 tonnes of gold coins and bars, compared to 62 tonnes purchased by the Chinese. This marked the highest demand for gold bars and coins in India since 2012. Jain attributed this spike to the duty-led price correction that fostered investor optimism, prompting many to enter the market.
Consumer demand saw a significant uptick towards the end of July and remained strong until mid-September, with investment demand increasing by 41%. Gold jewelry demand also rose, increasing by 10% to 171.6 tonnes compared to the previous year.
Despite the average gold price rising to Rs. 66,614 per 10 grams—up from Rs. 51,259.80 during the same period last year—demand continued to peak. Gold’s performance is buoyed by a volatile equity market amid the upcoming 2024 U.S. presidential election and rising tensions in West Asia.
Looking ahead, Jain expects total gold demand for the year to fall between 700 and 750 tonnes. Notably, India has outpaced China in overall gold demand in two of the last eight quarters—specifically during the October-December periods of 2022 and 2023.
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