Jewellery demand tumbles 32% YoY 3Q in India
According to the released data by World Gold Council (WGC) India, gold demand for Q3 2019 remained at 123.9 tonnes is down by 32% YoY-Year over Year, as compared to overall Q3 demand for 2018 of 183.2 tonnes. India’s Q3 2019 gold demand valued Rs 41,297 crores remained down by 18% as compared to Q3 2018 of Rs 50,085 crores.
India Gold Demand Statistics for Q3 2019 that is for the period of July to September says the total Jewellery demand in India for Q3 2019 decreased by 32% at 101.6 tonnes as compared to Q3 2018 of 148.8 tonnes. The value of jewellery demand was Rs 33,851 crores, down by 17% from Q3 2018 of Rs. 40,687 crore.
Total Investment demand for Q3 2019 at 22.3 tonnes was down by 35% in comparison to Q3 2018 of 34.4 tonnes. In value terms, gold Investment demand in Q3 2019 was of Rs.7,446 crores, down by 21% from Q3 2018 of Rs. 9,398 crores. Total gold recycled in India in Q3 2019 was 36.5 tonnes, up by 59% compared to 23 tonnes in Q3 2018. WGC estimates that the market India would demand gold in 2019 would around at 700 to 750 tonnes.
Expressing on 3Q 2019, Somasundaram PR, Managing Director, India, World Gold Council said, “Gold demand in India declined by 32% to 123.9 tonnes in Q3, due to weak consumer sentiment and high prices. Despite a step-up in buying during Akshaya Tritiya in Q2; monsoons, the absence of any major festivals and intervening inauspicious periods like Pitru-Paksh, muted demand in Q3. And the drop this year has been significant, making it one of the lowest third quarters since 2005.
While wedding-related purchases provided some support during the quarter, overall jewellery demand fell by 35% to 101.6t and bars and coins by 22.3%. This was due to low levels of general consumer confidence following a lot of noise about an economic slowdown and a lack of appreciation of the secular nature of price movements. The increase in custom duty in the July budget from 10% to 12.5% also did not help.
The sharp rise in the gold price and deep discount in the cash bullion market impacted both trade and the consumer outlook in Q3. The gold price rally failed to lose momentum during the quarter, breaching the Rs 35,000/10g level in mid-July and continued to climb to Rs 38,795/10g by the end of August.
This ~Rs 5,000/10g leap in two months caught consumers completely off-guard, prompting many to delay buying and the domestic gold price reached an all-time historic high of Rs 39,011/10g in the first week of September. The following softening of prices in the final few weeks of the quarter – due to the decrease in the international gold price and a strengthening rupee – actually led to expectations of a further drop and hence, did not aid demand.
Our full year gold demand estimate for India is 700-750 tonnes, although more likely at the lower end of the range. This will be a little above the 2016 level - which faced disruptions due to jewellers’ strikes, the introduction of PAN and demonetisation.”
