According to the World Gold Council (WGC) report, Bar and coin investment in India reached 55t – the highest for a third quarter since 2015. Bar and coin investment in India reached 55t – the highest for a third quarter (3Q) since 2015. Demand jumped 20% y/y and was 38% higher than its five-year quarterly average of 40t.
Y-t-d, investment has inched ahead of the same period last year, reaching 118t (vs 117t in 2022). Investors reacted to the downward correction in the gold price from its Q2 record high, adding to their holdings in the expectation of a price recovery in Q4 as the wedding and festive season gets underway.
The economic environment remains supportive, with most macro indicators pointing towards continued momentum in economic growth. And a good 2023 monsoon bodes well for farm incomes in Q4. That said, the recent jump in oil prices poses a challenge, given India’s heavy reliance on oil imports. And the recent gold price volatility, spurred by heightened global geopolitical concerns, may also discourage some investors.
On a wider Global glance, WGC report say, after a strong H1, bar and coin investment in Q3 was 14% lower y/y at 296t. Demand was, however, up q/q and comfortably above the five-year quarterly average of 267t. Y-t-d, demand in this sector almost matches that of last year – 876t vs 886t in 2022 – as H1 strength outweighed
Q3 weakness. The y/y decline in Q3 was due to certain pockets of lower demand, notably in Europe (Germany in particular), the US, Turkey, Australia and Iran.