53% rise in gold recycling in fourth quarter in Gujarat, says World Gold Council

AHMEDABAD: With gold prices touching record highs tracing the international rally in prices, the degree of recycling of gold went up significantly.

According to the World Gold Council, pan India, the amount of gold recycling rose 53%, at 30.5MT from October to December 2022 against 20.3MT in the corresponding period of 2021.

The trend is clearly visible in Gujarat — a state that has recorded high consumption of gold. According to estimates by WGC, 97.6MT gold was recycled during 2022.

Industry estimates by jewellers and bullion traders in Gujarat confirmed that Gujarat accounts for nearly 20% of the recycling and therefore some 20MT gold was recycled here too. This makes 46% of the gold imported to Gujarat during the year.

Somasundaram PR, regional CEO, India, World Gold Council, said, “In Q4 of 2022, India also noted a sharp increase in recycling. This surge in volume is mainly due to the increase in the rupee-denominated gold price, which was up 3% quarter-on-quarter in 2022. The Reserve Bank of India continued its gold purchases adding 33.5 tonnes in 2022, 57% lower than in 2021 when it had purchased 77.5 tonnes.” According to jewellers, at least 50% of transactions take place by exchanging old gold.

“Gold was in high demand since October due to muhurat purchases and the wedding season. However, since the price of gold went up drastically over the past three to four months, people’s budgets were toppled over and as a consequence, the degree of recycling gold increased,” explained Manoj Soni, member, Jewellers’ Association of Ahmedabad (JAA).

“During weddings, people often come with fixed budgets for purchasing jewellery but with highly volatile price of gold, many ended up exchanging old jewellery. Many others also exchanged previously purchased bars and coins to compensate for the wedding purchase,” Soni added.

Courtesy: Times of India