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Q3 2022 gold demand shines in India
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IANS | 01 Nov, 2022
The demand for gold went up by 14 per cent to 191.7 ton in India during
the third quarter of this calendar year, said the World Gold Council
(WGC) on Tuesday.
According to the WGC, the gold demand
in India was at 191.7 ton (value Rs 85,010 crore) during Q3 2022 as
against 168 ton (Rs 71,630 crore) of the corresponding period in 2021.
The jewellery demand for the period under review was at 146.2 ton up from 125.1 ton the previous year.
On the other hand, the total investment demand for Q3 2022 at 45.4 ton in comparison to 42.9 ton in Q3 2021.
The recycled gold showed a downward trend in Q3 2022 with 16 ton as compared to 20.7 ton in Q3 2021.
For
the nine months of 2022 the gold demand stood at 497.8 ton (jewellery
380.7 ton, investment 117.1 ton) as compared to 453.5 ton (jewellery
345.9 ton investment 107.6 ton
"India's total gold demand in Q3
2022 at 191.7 tonnes is a 14 per cent increase over last year. This
reflects better-than expected performance and strong consumer interest,
helping year-to-date demand return to pre-Covid levels," said
Somasundaram P.R., Regional CEO, India, WGC.
Credit expansion added impetus to this demand, with bank loan growth touching a nine-year high by quarter-end.
He
said the recovery in gold jewellery demand was primarily driven by
urban India, more specifically Southern parts, underpinned by robust
economic activities with a 17 per cent y-o-y increase in tonnage terms.
Rural demand however, was impacted by seasonal effect (monsoons) and inflation.
On the other hand, Indian bar and coin demand also saw a six per cent y-o-y improvement to 45.4 ton, he added.
"Looking
ahead, Indian retail investment is likely to continue to benefit from
safe-haven demand amid rising interest rates and a weakening rupee.
There's optimism in the overall outlook for the rest of the year with
weddings and Diwali demand in Q4, but it is unlikely to match last
year's record-breaking Q4. Our gold demand estimate for the full year is
around 750-800 ton similar to last year," Somasundaram said.
At
the global level, WGC said the demand for the yellow metal (excluding
OTC) in the third quarter of 2022 hit 1,181 ton, up 28 per cent
year-on-year.
Strong demand pushed the year-to-date total to its
pre-Covid levels. Gold demand was bolstered by the consumers and central
banks, although there was a notable contraction in investment demand.
According
to WGC, investment was down 47 per cent year-on-year, as exchange
traded fund (ETF) investors responded to a challenging combination of
markedly higher interest rates and a strong US dollar with significant
outflows of 227 ton.
These movements, alongside weakness in OTC
demand and negative sentiment in futures markets, hampered gold's price
performance -- contributing to an eight per cent quarter-on-quarter drop
in the price during Q3 2022.
Just as consumer gold demand
firmed, central bank buying picked up significantly with estimated
record purchases of nearly 400 t in the third quarter, said WGC.
"Looking
ahead, we anticipate central bank buying and retail investment to
remain strong and that could help offset potential declines in OTC and
ETF investment that may prevail if the dollar strength persists. We also
expect to see jewellery demand continue to perform strongly in some
regions such as India and Southeast Asia, while the technology sector
will likely witness further decline in the face of economic
deceleration," Louise Street, Senior Markets Analyst said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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