India Sees Upsurge In Q3 Gold Jewellery Demand
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