India's gold demand may hit 4-year high in July-Dec

In January-June, gold demand fell seven per cent to 346.2 tonnes from a year earlier.

Gold demand in India is likely to hit a four-year high between July and December on strong demand from the jewellery sector.

The World Gold Council has estimated India’s gold demand in 2015 at 900-1,000 tonnes.

Demand is likely to be at least 554 tonnes in the second half of 2015 as the first half saw demand for 346.2 tonnes of the metal.

After its recent low of Rs 24,800 per 10 gm, standard gold hit Rs 28,000 but fell back to trade below Rs 27,000.

Gold was Rs 28,100 per 10 gm on July 26, 2014, Rs 1,000 higher than Rs 27,030 today.

“Stockists’ demand was high in July as jewellers were preparing for the India International Jewellery Show in the first week of August.

But the demand tapered off.

"With the festive and wedding seasons, we see strong demand for gold in the second half,” said Rajan Venkatesh, managing director, India bullion, ScotiaMocatta.

Consumer demand for gold in India fell by 25 per cent to 154 tonnes in April-June.

In January-June, gold demand fell seven per cent to 346.2 tonnes from a year earlier.

Jewellers used the lean season as an opportunity to lure consumers with discounts. Tribhovandas Bhimji Zaveri, Reliance Jewels, Tanishq and other jewellery firms offered up to 100 per cent discount in making charges.

“Jewellery demand has remained robust so far in the second half,” said Mehul Choksi, managing director, Gitanjali Gems.

“The worry is the weak monsoon, which may lower farm output. Rural demand could be affected, but the overall demand for gold is likely to remain reasonably strong during July-December,” Venkatesh said.

“Gold demand will be robust in the second half due to the upcoming wedding and festival seasons.

"The season started with consumers taking advantage of softening gold prices,” said Somasundaram PR, managing director (India), WGC.