Gold demand rises in July – September
This indicates that consumers plan to hold gold rather than sell it
According to Somassundaram P.R., regional(India) CEO of World Gold Council, demand for gold in India which was 47% higher in the July-September quarter as compared to the previous year is expected to rise further due to the festive season.
India has a demand of 139.1 tonnes in Q3 2021which is 47% higher as compared to 2020. This is mainly due to a firm grip on the pandemic with high vaccination rates and falling number of covid cases which has to lead to a strong rebound in economic activity. As per the data released by the council, demand for gold jewelry increased 58% and demand for bars and coins as investments grew by 18% and according to a report released by the council, 20.7 tonnes of gold has been recycled which is a 50% drop. This indicates that consumers plan to hold gold rather than sell it. Further, the CEO pointed out that the upcoming festival and wedding season could be one of the busiest gold-buying seasons since the start of the pandemic.
CEO said “In the months ahead, soaring commodity prices and logistics costs are expected to impose further pressures, and the RBI has already adjusted its inflation expectations higher. Rising inflation tends to drive gold demand Gold is perceived as a strong hedge against inflation and decades of data supports this assumption.”