Indians are gradually emerging as hoarders of gold bars, analysis of data relating to demand for gold in the quarter ended June 2003 indicates. The trend represents a marked shift from the traditional Indian habit of buying pure jewellery.
India continues to top the chart of gold consumers, surpassing the cumulative demand of the west Asian market, China and Japan. Indians continued to buy gold despite the near 11 per cent rise in the price of gold and in fact stepped up their purchases of the yellow metal in the quarter ended June 2003.
The rise in demand also defied the hardship caused by the poor monsoon of 2002, which curtailed disposable incomes in the rural India.
According to the United Kingdom-based Gold Field Mineral Services, the official data channel of World Gold Council, Indians bought a total of 184 tonnes of gold for jewellery during April-June quarter, up 36 per cent from 135.2 tonnes in the last comparable quarter.
The increase in demand has surprised analysts in view of the rise in gold prices over the last year. The average gold price at London morning fix has appreciated 11 per cent quarter over quarter from $312.40 per ounce to $346.90.
Accordng to GFMS, the overall recovery in gold consumption can be largely attributed to increased 'bar hoarding" in India.
India's demand bounced back in the second quarter chiefly through lower price during January-March quarter which averaged at $352.09 and increased perception of bar hoarding.
During April-June quarter, gold consumption in China was 45.7 tonnes, 20.2 tonnes in Japan, 56.8 tonnes in South East-Asia, 98.5 tonnes in Middle East, 496 tonnes in Turkey, 64.7 tonnes in the USA and 32.9 tonnes in Europe.
GFMS further says that old gold scrap volumes declined in the April-June quarter from the first quarter of 2003. The 6 per cent quarter-on-quarter fall in average rupee price played a key part in the 23 per cent quarter on quarter drop in jewellery scrap.
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