India's Gold Jewellery Demand Up 49% On Year In June Quarter

Image
Capital Market
Last Updated : Jul 28 2022 | 1:04 PM IST

The World Gold Council or WGC noted in a latest update that robust wedding and festival sales helped boost Q2 jewellery demand in India to 140 tonnes (t). The 49% y-o-y increase in Q2 demand was largely due to a very weak Q2'21; nevertheless, demand in the most recent quarter was healthy from a longer-term perspective - 6% above the five-year quarterly average of 132t. Demand in H1 reached 234t - 6% higher y-o-y - as the weak first quarter offset Q2 strength.

Sales for Akshaya Tritiya in May, together with wedding purchases during the traditional Q2 wedding season generated the growth in demand. The timely correction in the gold price from the April high also contributed to the positive picture. But despite healthy Q2 demand, the macroeconomic backdrop of a weaker currency, rising inflation and higher interest rates posed headwinds.

Urban Indians have been the main driver of demand growth as economic activity in these areas has largely normalised to pre-pandemic levels. In contrast, rural consumers have been heavily impacted by rising inflation and higher interest rates on agricultural loans, meaning demand from this quarter has yet to recover fully from the impact of COVID. The outlook for the rest of the year is mixed. While festival and wedding demand should be a positive factor in Q4, demand will face challenges from a depreciating rupee, higher inflation and the higher import duty on gold.

Powered by Capital Market - Live News

Disclaimer: No Business Standard Journalist was involved in creation of this content

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

First Published: Jul 28 2022 | 12:21 PM IST

Next Story