Recently, the World Gold Council (WGC) announce, India’s Gold Demand Statistics for Q4 2023 (Quarter ended, October – December). At the juncture, Somasundaram PR, Regional CEO, India, World Gold Council said, India’s gold demand in 2023 declined by 3% to 747.5 tonnes strongly influenced by rising gold prices.
Although consumer interest remained high, it lagged trade sentiment. October’s price correction during Navratri stimulated a robust consumer response, boosting Diwali sales in November. However, demand declined in December as gold prices resumed an upward trend, resulting in a 9% drop in Q4 jewellery demand compared to Q4 2022.
Bar and coin investment in India rebounded, growing by 7% to 185 tonnes year-on-year. Q4 demand touched 67 tonnes, 64% above the five-year quarterly average. The correction in gold prices led to some robust investment responses in Q3 and Q4, supported by increased interest from physically backed gold ETF investors, setting total holdings in Indian-listed products to a record 42 tonnes by year-end.
Recycling was 20% higher due to low and supportive higher prices but at 117 tonnes, could be considered the normative expected level. Net gold imports surged by 20% to 780.7 tonnes in 2023, primarily due to substantial inventory building by the trade.
Looking forward to 2024, India’s gold demand should benefit from ongoing positive economic conditions. The subdued demand range of 700-800 tonnes since 2019 attributable to continuous rise in prices, increase in duties, stock market outperformance, near-term elections spending impact and acceptance of elevated price levels, suggest the potential for a spurt in demand in the near future.
However, any short-term impediments to higher demand could arise from another round of sharp price hikes and volatility triggered by global factors.