India’s gold jewellery demand weak in Q1 2023, says World Gold Council report

The gold jewellery demand of 78 tonnes in the first quarter of 2023 was the weakest for the first quarter in India since 2020

Indian consumers are known to spend a lot on gold jewellery, but this year the demand was low in the first quarter. According to a report by World Gold Council (WGC), the gold jewellery demand of 78 tonnes in the first quarter of 2023 was the weakest for the first quarter in India since 2020.

The report says that the gold jewellery demand in Q1 2023 was 17% lower compared with Q1 2022. After a strong Q4 2022, the Q1 2023 figure generated a stark 65% q-o-q decline in India.

Why Indians purchased less gold jewellery in Q1

“India’s gold demand in Q1 2023 fell 17% y-o-y to 112.5 tonnes following record high and volatile gold prices. This impacted sentiment, and gold jewellery demand dropped to 78 tonnes from 94.2 tonnes in Q1 2022 with little support from the investment side,” said Somasundaram PR, Regional CEO, India, World Gold Council.

“Since 2010, barring the pandemic gap, this is the fourth time that Q1 gold jewellery demand fell below 100 tonnes,” he added.

Not just gold jewellery, investment demand in India, primarily gold bars and coins, too saw a drop of 17% to 34.4 tonnes in Q1 2023 from 41.3 tonnes y-o-y. “Global factors, primarily US interest rate hikes, pushing up dollar prices coupled with rupee depreciation kept gold prices above Rs.60,000/10g, nearly 19% jump over last year,” the report said.

The report predicts that gold demand in 2023 in India will remain muted even as the economic momentum in the country has remained healthy and the RBI rate hike cycle has paused.

Retail Jeweller India News