In­dia Sees Up­surge In Q3 Gold Jew­ellery De­mand

Solitaire - - KP UPDATE -

Global de­mand for gold was down just 2% year on year to 929 tonnes, ac­cord­ing to the lat­est Gold De­mand Trends re­port from the World Gold Coun­cil (WGC), cov­er­ing the pe­riod July to Septem­ber 2014. Over­all jew­ellery de­mand soft­ened slightly down 4% to 534 tonnes, when com­pared with an ex­cep­tional quar­ter in 2013.

Tak­ing a slightly longer term view, Q3 2014 jew­ellery de­mand was marginally stronger than the quar­terly av­er­age of 527.6 tonnes. Year-to-date vol­umes con­tinue to ex­tend the broad up­trend from the low seen in 2009.

Look­ing be­hind this over­all num­ber, in In­dia, jew­ellery de­mand saw a 60% year-on-year in­crease to 183 tonnes in Q3 2014, the sec­ond high­est Q3 on record for the coun­try. While the in­crease is partly re­flec­tive of the weak­ness in Q3 in In­dia last year – when the gov­ern­ment in­tro­duced im­port curbs and raised im­port du­ties – it also demon­strates the re­silience of the coun­try’s ap­petite for gold jew­ellery. Im­proved con­sumer con­fi­dence in both the do­mes­tic econ­omy and the new gov­ern­ment added to the pos­i­tive sen­ti­ment, with strong lev­els of pur­chas­ing be­ing seen in the build up to Di­wali.

“Gen­eral sen­ti­ment among the In­dian pop­u­lace is on the up, aided by con­fi­dence in the new gov­ern­ment. Dur­ing a week­long field trip to In­dia in Oc­to­ber, support for Prime Min­is­ter Naren­dra Modi and his eco­nomic poli­cies was pal­pa­ble. Such op­ti­mism ap­peared to be jus­ti­fied by wide­spread up­grades to In­dian growth forecasts. This pro­vided an en­cour­ag­ing back­drop for gold de­mand. A weak­en­ing of the ru­pee gold price dur­ing Au­gust and Septem­ber also sup­ported gold de­mand to an ex­tent. Although In­dian con­sumers are typ­i­cally wary of buy­ing gold while the price is still mov­ing, pre­fer­ring to wait un­til it set­tles at a more sta­ble level, the op­por­tu­nity to buy at cheaper prices proved, for some, hard to re­sist,” the re­port said.

“Septem­ber saw much of the surge in de­mand, a fact borne out by trade statis­tics which show a sharp jump in gold im­ports for that month. This can largely be ex­plained by the on­set of the fes­ti­val sea­son. With Dhanteras herald­ing the start of Di­wali in mid-Oc­to­ber, jew­ellery pur­chases be­gan to pick up mo­men­tum in Septem­ber. Th­ese were mag­ni­fied as con­sumers had de­ferred their gold buy­ing while they waited for the price to set­tle at lower lev­els. The re­lease of this pent up de­mand dur­ing the clos­ing weeks of the quar­ter ac­cel­er­ated the

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