The demand for gold in India remained strong during the July-September period of the year, with a notable surge of 18% to 248.3 tonnes compared to the same period last year. This growth was primarily attributed to increased jewellery consumption and investment in gold, as reported by the World Gold Council. The value of India's gold demand also saw a significant increase, rising by 52% to Rs 1.65 lakh crore during the quarter.
The report highlighted that the reduction in gold import duties in July played a crucial role in reviving jewellery demand, which saw its strongest third quarter performance since 2015. India witnessed a 10% increase in demand for gold jewellery, reaching 171.6 tonnes in the September quarter, with a particular emphasis on purchases for weddings. The duty cut helped mitigate the impact of rising gold prices, prompting early purchases for upcoming weddings and tapping into pent-up demand from previous periods, especially in lower tier cities and rural areas.
Furthermore, investment demand for bullion in India surged by 41% during the same period, reaching 76.7 tonnes, the highest level for the September quarter since 2012. This increase was driven by investor optimism and bullish price expectations following the price correction triggered by the July duty cut. The report suggested that India's gold demand was expected to remain robust in the fourth quarter, driven by events like Dhanteras and continued wedding demand. However, the rising gold price might lead investors to wait for price corrections before adding to their holdings.
Despite a record high of gold prices reaching $2,474.3 an ounce in the September quarter, demand for gold globally also saw a significant increase, rising by 5% to a record high of 1,313 tonnes. The surge in global demand was fueled by factors such as inflows into gold exchange traded funds, future interest rate expectations, and geopolitical uncertainties. While certain segments like gold jewellery consumption and bar and coin investments saw a decline on a yearly basis, the overall global demand for gold remained strong, exceeding $100 billion for the first time ever. Additionally, the report highlighted that Chinese demand for gold jewellery experienced a decline, with total consumption falling by 33% on a yearly basis, although there was a quarterly increase attributed to seasonal factors.