This Diwali, gold consumption in India surged by 10%!

Recently, Colin Shah, MD, Kama Jewelry attempted to gaze the gold demand during the Diwali 2023. He said, gold consumption in India increased by 10% to 210.2 metric tons during the July-September quarter of the calendar year as compared to 191.7 metric tons in the previous year for the same period.

This was driven by improvements in consumption of gold for wearable purpose as well as an attractive asset class for investments, thus boosting the overall demand due to price corrections.

India, being the second largest gold consuming nation in the world, consumption in the second half of every year is typically higher than in the first half, coinciding with Diwali in the month of October (beginning of Q4 of Calendar Year).  

Currently, gold prices are on the rise due to the uncertainty in the international market caused by the ongoing Israel – Hamas conflict. However, with the festive buying going on in full swing, the demand for yellow metal in the domestic market will remain unimpacted and continue to strengthen owing to the upcoming wedding season.

In the analysis he also considered the recent Post-Fed Announcement. He said, the US Fed has kept the rate unchanged for the second time and is on the much-expected lines in reflection of the uncertainty in the global economy. This move indicates the efforts of the Fed body to keep inflation in control with sustained yet steady momentum towards the goal of bringing down the inflation rate within the range of 2%.

Having said that, another rate hike is probable during this financial year. This may result in fluctuations at an international level. However, the mild turbulence will be well absorbed on the domestic front owing to the festive gold buying in India.

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