Consumption during the Dec quarter is estimated at around Rs 6,600 cr, which will take the metal’s contribution to GDP to 1.8-1.9%
At a time when most asset classes are not doing well, gold continues to boost the economy with higher contribution.
The gold consumption during the December quarter is estimated at $10 billion (about Rs 6,600 crore), which will take contribution to the gross domestic product to 1.8-1.9 per cent.
In the September quarter this financial year, valuables contributed 1.6 per cent, or Rs 53,335 crore (Rs 533.35 billion) to the gross domestic product, which was 1.3 per cent or Rs 38,882 crore (Rs 388.82 billion) in the corresponding quarter in the past financial year.
Madan Sabnavis, chief economist, CARE, a rating agency, said, “Gold consumption for the September quarter was 1.6 per cent of GDP at current market prices.
“This involved a total value of Rs 53,335 crore for Q2.
“With the demand picking up in the current quarter due to the marriage season as well as festivals of Dussehra and Diwali, gold value could touch $10 billion or Rs 65,500 crore, which in turn would be around 1.8-1.9 per cent of GDP in this period.”
India’s gold import in the December quarter is estimated to come down.
However, net gold imported for the domestic market with higher supply of old jewellery and higher value addition will keep amount of valuables high, said a bullion analyst.
Imports in the December quarter is estimated at 200 tonnes, which was 279 tonnes last year.
However, share of scrap supply/sale or conversion of old jewellery is estimated much higher compared to 22 tonnes last year same period.
A bullion analyst with a global agency said, “Rural distress and drought have resulted
in higher sale of gold, which helped lower demand for import in the last few months. Gold prices have again started falling and now trading at around Rs 25,000 per 10 gram, which is also attracting buyers.
“Unrefined gold adds higher value and value addition in sale of old jewellery is also higher. In totality, this will increase domestic consumption of gold to around $10 billion.”
Sudheesh Nambiath lead analyst at GFMS Thomson Reuters said, “Gold and silver consumption and jewellery sales is expected to remain good in December quarter, which means contribution of valuables in GDP will be retained at higher levels.”
Image: A model displays gold jewellery. Photograph: Reuters
