The WGC had earlier expected demand in the world’s second biggest consumer after China to rise to between 800 and 900 tons in 2024. India’s gold consumption fell 1.7% in 2023 from a year earlier to 761 tons.
Domestic prices of gold hit a record high this month of 73,958 rupees ($885.72) per 10 grams. They have risen more than 13% in 2024 after rising more than 10% in 2023.
Soaring gold prices, leading to effectively higher returns, are boosting investment demand while suppressing consumption for use in jewellery, which makes up three-quarters of total demand, Jain added.
Indian gold consumption in the Jan-March quarter rose 8% to 136.6 tons, as investment demand jumped 19% and jewellery demand rose 4% in the quarter, the WGC said.
In the March quarter, scrap supplies jumped 10% from a year ago to 38.3 tons, the second highest on the record, as the price rally prompted some investors to liquidate holdings, the data showed.
Buying gold during festivals is considered auspicious in India, but demand was weak during this month’s Gudi Padwa festival, also known as Ugadi in some regions, as prices jumped to a record high.
Demand during the approaching annual Hindu and Jain holy festival of Akshaya Tritiya is likely to be moderate, however, Jain said.
The Reserve Bank of India’s gold reserves rose by 19 tons in March quarter, surpassing last year’s net purchases of 16 tons, the WGC said.
($1=83.5000 Indian rupees)
(By Rajendra Jadhav; Editing by Clarence Fernandez)