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Gold demand to remain high: WGC
India's gold demand is expected to be around 965 tonnes in the 2013 calendar year, up from 864 tonnes last year, thanks to favourable prices, the World Gold Council said on Thursday.
In the first quarter of 2013, though, imports declined 5.7 per cent, as traders relied mostly in stocks to meet rising demand.
In the January-March quarter, gold demand rose 27 per cent in volume terms to 256.5 tonnes, compared with the corresponding period last year.
In value terms, demand jumped 32 per cent to Rs 72,899 crore (Rs 728.99 billion).
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Gold demand to remain high: WGC
"We believe demand will be robust in the second quarter as well, as the drop in price of gold has only increased the appetite.
Also, in the April-June quarter last year, there was a strike by jewellers," Somasundaram P R, managing director-India, WGC, told reporters.
The total investment demand for gold in the March quarter rose 52 per cent in volume terms, while jewellery demand rose 15 per cent during the same period, he said.
Though WGC did not give any price outlook, the trend showed a good monsoon would tend to shift a large part of rural incomes towards gold, Somasundaram said.
"Also, in 2013, there are 20 per cent more auspicious days for marriage, compared to 2012, which makes us believe that retail demand will be robost in 2013."
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Gold demand to remain high: WGC
Globally, the data showed total gold demand was down 13 per cent year-on-year in the March quarter to 963 tonnes, mainly due to a heavy outflow from gold exchange-traded funds.
ETFs saw a net outflow of 177 tonnes in the quarter.
By contrast, there were strong inflows into other forms of investment.
Bar and coin demand was 378 tonnes, up 10 per cent, the WGC data showed.
Total demand in China stood at 294 tonnes in the first quarter, a rise of 20 per cent. Jewellery demand in the quarter was a record 185 tonnes, up 19 per cent, while bar and coin investment stood at 110 tonnes, which was up 22 per cent from the corresponding period last year.
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Gold demand to remain high: WGC
"India and China will continue to be the main drivers of gold demand in the world, though in the first quarter, Chinese demand outstripped India.
"That was the case in 2012 as well because Chinese people usually purchase gold during the January-March quarter, due to their New Year and other festivals," Somasundaram said.
On a recent circular by the Reserve Bank of India on curbing gold imports by banks on a consignment basis, Somasundaram said curbing gold demand, which has a retail appetite in India, might not be very successful in the short term and might push demand into unauthorised channels.
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Gold demand to remain high: WGC
"We believe gold demand in India is because of cultural issues and is independent of supplies, so putting supply curbs would not lead to drop in demand, but will push it to unauthorised channels," he said.
Somasundaram also said that monetising assets like gold can help in taking away the focus from gold.
On gold loan, Somasundarama said that it is a welcome move and will help in driving economic activity.
PTI adds from New Delhi: Gold prices dropped Rs 500 per 10grammes to a one-month low of Rs 26,800 per 10grams in the national capital on Thursday due to heavy selling by stockists, driven by weak global trend.
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Gold demand to remain high: WGC
This fall was in continuation to a steep fall of Rs 600 on Tuesday to hit a level last seen on April 17, after the metal tumbled in overseas markets driven by reports investors cutting their holdings.
Gold in Singapore, which normally sets the price trend on the domestic front, dropped 0.4 per cent to $1,387.30 an ounce, the cheapest since April 19.
Silver also plunged Rs 1,000 to Rs 43,700 a kg on poor offtake by industrial units and coin makers.
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Gold demand to remain high: WGC
Besides, investors shifting their funds from melting bullion to rising equity markets further influenced the trading sentiment to some extent.
On the domestic front, gold of 99.9 and 99.5 per cent purity plunged a further Rs 500 each to Rs 26,800 and Rs 26,600 per 10 gramnes, respectively. Sovereigns also dropped Rs 300 to Rs 23,700 per piece of eight grammes.
Silver ready dropped Rs 1,000 to Rs 43,700 a kg and weekly-based delivery Rs 940 to Rs 43,940 a kg. Silver coins too tumbled Rs 1,000 to 74,000 for buying and Rs 75,000 for selling of 100 pieces.
