GJF forecasts 10% jump in Indian gold demand

Author: Paul Ploumis
10 Mar 2015 Last updated at 08:26:18 GMT

MUMBAI (Scrap Monster): The All India Gem and Jewellery Trade Federation (GJF) sees 10% jump in gold demand in the country during the upcoming wedding season which is about to kick off. The demand in gold jewellery sector is expected to post robust growth of 5-10% over the previous year. The significant fall in gold prices will turn out to be the key driver for improved gold jewellery sales, noted Bachhraj Bamalwa, Director, GJF.

The recently released World Gold Council (WGC) report had indicated that the country’s gold demand totaled 842.7 tonnes in 2014, sharply lower when matched with the demand of 974.8 tonnes in 2013. In dollar terms, the overall gold demand was down by 23% during 2014. The total investment demand plunged by over 50% to 180.6 tonnes as compared with 362.1 tonnes in 2013. On the other hand, buoyant festive buying and optimistic economic growth sentiments led to 8% growth in total jewellery demand in the country during the year.

With the government not lowering the import duty on gold, all stalled gold purchases have begun to unleash. Also, jewelers have started restocking of gold ahead of the wedding season. Retail investor demand and marriage gold demand in the country may lead to increased gold jewellery sales in the country, especially due to the fact that gold prices have begun another leg of downward journey with the announcement of strong US employment data.

The official gold imports by the country during Feb ’15 are likely to fall to nearly 40 tonnes as compared with 60 tonnes during January this year. However, the anticipated rise in gold demand ahead of wedding season may lift gold imports during the month of March.