The World Gold Council, an organisation supported by gold miners, expects demand for the yellow metal to touch 900 to 1000 tonnes in 2013 against 863 tonnes in 2012 despite government measures to curb demand in a bid to control current account deficit. The demand in the first half this year was at 567 tonnes.
Somasundaram PR, Managing Director (India), World Gold Council, said buying interest in gold during the December quarter would be boosted by good monsoon and fall in price.
Moreover, he added, the fourth quarter of the calendar year is traditionally considered a peak season for jewellers with many festivals.
Research report
He was speaking to media after releasing ‘The direct economic impact of gold’, an independent research report prepared by PwC. This is the first time World Gold Council has taken efforts to track gold contribution to local and global economic development.
The direct gross value addition by gold from consumption of bars and coins in India was lower compared to China despite India topping the demand table. India recorded value addition of $17 billion on a turnover of $19 billion while in China, the value addition was $9 billion on a turnover of $15 billion in 2012.
In India, jewellery trade is dominated by unorganised sector with little awareness on brand and purity. This would have led to lower value addition, he said. However, the value addition data for India does not include the tax collected by the Government, he added.
Somasundaram was confident that people will continue to buy gold despite the impending economic slowdown.
Safe haven
“Generally, demand for gold picks up whenever there is turbulence in economy and other investments turn negative. Investors consider gold as safe haven,” he said. .
Recycling of gold in India has dipped in the last few months due to restriction on imports. People don’t offer their gold for recycling expecting price hike due to short supply on the back of import curbs, he said.