What are the factors to drive Indian Gold demand?

NEW YORK (Scrap Register): HSBC sees potential for Indian gold buying to pick up, and Commerzbank said a slump in the country’s gold purchases already appears to be abating. 
Commerzbank analysts cited reports that Indian jewelry manufacturers have recouped roughly half of the business they lost following the government’s demonetization. 
“It would appear that people are using cashless methods of payment, such as credit cards and online fund transfers, to buy gold – in the country’s cities at least,” Commerzbank added.
“In our opinion, it is doubtful whether this will immediately result in higher gold imports given that jewelry manufacturers are still likely to have large quantities of gold in stock following the high gold imports in October and November and the collapse in gold demand in recent weeks,” Commerzbank noted.
HSBC, meanwhile, pointed out that India’s gold demand may be revived when new large denomination currency notes are made available. 
HSBC’s chief India economist, Pranjul Bhandari, points out that effective currency in circulation has fallen 60% since demonetization, implying a sizable ongoing cash crunch. 
“This is also crimping gold demand and explains the slide in bullion imports in December,” said Jim Steel metals analyst at HSBC. 
“But Bhandari also states that 80% of outstanding cancelled notes have made their way back to banks already, suggesting that the negative wealth shock may not be too high. This may be good for gold demand later in 2017,” steel added.