India’s demand for gold jewellery saw a significant decline of 17% year-on-year in the June quarter of 2023, according to the latest report from the World Gold Council.
Per the report, the demand fell to 107 tonnes, marking the lowest second-quarter figure since the COVID-impacted period of 2021.
Despite this downturn, the broader economic indicators for India remain positive. The GDP growth forecast stands strong at 7%, and there are signs of recovery in key rural sectors such as increased sales of two-wheelers and fast-moving consumer goods (FMCG).
The decline in gold jewellery demand can be attributed primarily to record-high gold prices during the quarter.
The report stated that although prices moderated slightly from their peak in May, they remained above the crucial threshold of Rs 70,000 per 10 grams throughout June.
This sustained high pricing contributed to subdued demand, evident in the persistent discounts observed in the local market.
Several other factors, such as the national elections held from mid-April to early June, disrupted consumer spending patterns, including purchases of gold jewellery. Additionally, an intense heatwave in late May, which saw record temperatures in Delhi and other parts of the country, further impacted consumer sentiment and spending.
Despite these challenges, India’s overall economic outlook remains resilient, supported by robust growth forecasts and ongoing recovery efforts in key economic sectors.
Read more in this report in World Gold Council.
