Reports indicate that from July to September 2024, India purchased 248.3 tonnes of gold—51 percent more than China’s 165 tonnes during the same period. According to the World Gold Council’s latest data, Indian consumers primarily buy gold in the form of coins and bars. Additionally, gold demand in India grew by 18 percent year-on-year during this quarter.
The surge in demand can be attributed to a reduction in the import duty on gold, which was lowered from 15 percent to 6 percent. Finance Minister Nirmala Sitharaman announced this change in her Union Budget 2024-25 speech on July 23.
Wedding and Festival Demand
An Economic Times report quoted Sachin Jain, regional CEO of the World Gold Council, stating that India’s gold demand remained strong in Q4, driven by celebrations like Dhanteras and wedding season. Despite rising gold prices, driven by the duty cuts, investors may seize the opportunity to expand their holdings. In the July-September quarter, Indian consumers bought 77 tonnes of gold coins and bars, while China bought 62 tonnes.
Quarterly Highlights
Demand for gold bars and coins reached its highest level since 2012 during the July-September quarter. Changes in tariffs sparked investor optimism and positive price expectations, leading to increased market participation. Jain noted that consumer demand picked up significantly by the end of July and remained robust until mid-September, with a 41 percent rise in investment demand.
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Increased Demand
Gold jewelry demand in India rose by 10 percent, totaling 171.6 tonnes during the July-September 2024 period compared to the previous year. Overall, gold demand peaked in this quarter, although the average price reached ₹66,614 per 10 grams, up from ₹51,259.80 the previous year.
Looking ahead, gold is experiencing a bullish trend amid volatile equity markets influenced by the 2024 US presidential election and escalating tensions in West Asia. Jain predicts that India’s total gold demand for the year will be between 700 and 750 tonnes. Notably, India has outpaced China in total gold demand in two of the last eight quarters, specifically in the October-December periods of 2022 and 2023.