Gold demand may decline in the second half. This is because the demand for it is decreasing due to inflation and rising prices. The World Gold Council (WGC) said that less gold is being bought in India. However, due to fewer gold imports, the trade deficit of the country can also be reduced. This will help in arresting the depreciation of the rupee. Gold demand stood at 170.7 tonnes in the April-June quarter this year. This is 43% higher than 119 tonnes a year ago. In value terms, it grew 54% to Rs 79,270 crore in the second quarter from Rs 51,540 crore a year ago.
More impact is visible in villages
According to the council, the impact of inflation is more visible in the villages. Those people are finding it difficult to save more and buy gold. The retail inflation rate in the country is above 7%. Also, this is more than the RBI's target of 6 percent for 6 months.
The price of gold increased due to the weakness of the rupee
The depreciation of the rupee against the dollar has led to a rise in gold prices. At the same time, the import duty imposed on it is also affecting the demand. Gold consumption remained high in the June quarter on account of Akshaya Tritiya and weddings. In March, gold prices were Rs 43,994 per 10 grams, which rose to Rs 46,504 in June.
Estimated consumption of 800-850 tonnes
The WGC had earlier estimated that gold consumption could be 800-850 tonnes this year. In 2021 it was 797 tonnes. Now it can go below 800 tonnes. Globally also, the overall gold demand in April-June fell by 8 percent to 948.4 tonnes as compared to a year ago.
Demand for gold jewelry increased compared to last year
April-June 2021 April-June 2022 edge
Consumption: 94 tons 140 tons 49%
Price : Rs 65,140 crore Rs 40,610 crore 60%
Investing in Gold ETFs increased
According to the report, investment in gold ETFs rose 12 percent to 2,189 tonnes in the January-March quarter from 1,951 tonnes a year ago. The demand for rods and coins stood at 244.5 tonnes. Reserve Bank of India has bought 15 tonnes of gold in 6 months of this year. In 2021, 77 tonnes were procured.
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