Gold business up 54% in Q2 of 2022 at Rs 79,000 crore

Chennai: Gold demand in India was up 43% at 170.7 tonne in Q2, 2022 as against 119.6 tonne in Q2, 2021. Demand for gold jewellery was higher by 49% at 140.3 tonne (94 tonne) marked by festivals and wedding buying. The jump in demand was also partially due to the comparatively lower volume reported in Q2 of 2021 in the wake of Covid second wave.

In value terms, the gold demand in Q2 this year was Rs 79,270 crore, an increase of 54% from Rs 51,540 crore in the comparable year ago quarter. In the case of gold jewellery, the value of gold sold in Q2, 2022 was Rs 65,140 crore, a 60% jump against Rs 40,610 crore sold in the second quarter of 2021.

“India’s gold demand for Q2’ 22 left behind the anxiety caused by the pandemic in Q1 and marked by festivals and wedding buying. Akshaya Tritiya coupled with traditional wedding buying spurred jewellery demand,” said Somasundaram PR, Regional CEO, India, World Gold Council.

According to him, gold demand drew support from volatility in equity markets and inflation expectations. But the demand grew by just 6% in the first half of 2022. “In the second half of 2022, jewellery demand in India faces downside risks, due to uncertaintly over the economic outlook, a higher import duty and the possibility of additional curbs on gold buying with an eye on INR-USD exchange rate. Upside potential for demand can come from expectations of a normal monsoon, higher inflation and the possibility for rangebound prices,” Somasundaram said.

Even as demand makes a recovery towards near-normal, the Indian bullion market is altering with some fundamental structural reforms such as mandatory hallmarking and exchange trading. The proposed launch of the India International Bullion Exchange will kick-start a journey to make India a trusted and efficient trading hub and extend its influence in the global bullion markets, he pointed out.

“Post Covid people are happy to spend – be it travel, purchasing or eating out. Purchasing gold jewellery has become a favourable indulgence now than merely keeping cash on hand. People have started spending and this is reflecting on the increased demand for gold jewellery not just in Chennai but across the country,” said Jayantilal Challani, president, The Jewellers and Diamond Traders Association of Madras.

Courtesy: Economic Times