Gold demand in India surged by 18% in the September quarter, reaching 248 tonnes compared to 210 tonnes in the same period last year. This increase is primarily attributed to a significant drop in prices following a government decision to halve the import duty.
In monetary terms, gold demand soared by 54% to ₹1.65 lakh crore, up from ₹1.07 lakh crore.
The rise in demand was not limited to retail consumers; the Reserve Bank of India (RBI) also added gold to its reserves each month during the last quarter. The RBI purchased 13 tonnes of gold as part of its reserves management, although this was slightly lower than the 18 tonnes bought in the March and June quarters of this year. Overall, the RBI’s gold reserves increased by 6% to 854 tonnes compared to last year.
Demand for gold jewelry rose by 10% to 172 tonnes, up from 156 tonnes, with a value increase of 43% to ₹1.14 lakh crore, compared to ₹79,830 crore last year. Additionally, investments in gold increased by 41%, totaling 77 tonnes, up from 54.5 tonnes.
As gold prices reached new highs, gold recycling also saw a 22% increase, rising to 23 tonnes from 19 tonnes. Gold imports jumped dramatically to 360 tonnes, compared to just 193 tonnes last year.
Excluding import duty and GST, average gold prices were reported at ₹66,614 per 10 grams, up from ₹51,260 in the third quarter of last year.
Sachin Jain, Regional CEO for India at the World Gold Council, noted that the reduction in gold import duties in July led to a revival in jewelry demand, marking the strongest third quarter since 2015. He highlighted that consumer demand picked up significantly in late July and remained robust until mid-September.
“Bar and coin demand in India reached its highest third quarter level since 2012. Investor optimism and bullish price expectations were driven by the July duty-led price correction, which enabled many investors to enter the market,” Jain added.
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