India’s gold demand likely to hit four-year low in ’24

India’s gold demand is projected to decline to a four-year low in the December quarter 2024, as record-high prices dampen consumer enthusiasm during the peak festival season, according to the World Gold Council (WGC) report on Wednesday.

The demand is expected to range between 700 and 750 metric tons in 2024, the lowest since 2020. This marks a decrease from last year’s 761 tons, said Sachin Jain, CEO of WGC’s Indian operations.

Typically, demand for gold increases towards the end of the year in India due to weddings and festivals like Diwali and Dussehra. However, this year, many buyers made early purchases in August after a reduction in import duty.

Buyers are now waiting for prices to stabilise before making more purchases. Domestic gold prices reached a record high of 79,700 rupees ($947) per 10 grams on Wednesday, marking a 26 per cent increase in 2024.

Indian gold consumption in the July-September quarter increased by 18 per cent to 248.3 tons, driven by a 41 per cent surge in investment demand and a 10 per cent rise in jewellery demand, the WGC added.

India’s physically backed gold ETFs saw inflows for the sixth consecutive month in September, with holdings rising to 52.6 tons from 43.3 tons in January, as per WGC data. Jain noted that with stock market liquidation, there could be additional inflows into gold this quarter.

Attribution: Reuters & WGC report