Despite a 28 percent surge in gold prices this year, the World Gold Council (WGC) expects India’s gold consumption to remain within the projected range of 700-750 tonnes.
“Even if you only take the 100 per cent of November 2024 imports (officially estimated at 173 tonnes), we will meet our projection of 700-750 tonnes,” Sachin Jain, Regional CEO, India, WGC told. business line in an interview here.
This demand could, however, be lower than the 762 tonne recorded in 2023, but will not be a cause for worry given that consumption levels have been maintained despite sharp rise in prices of gold in 2024.
In January-September 2024, total gold demand in India stood at 537 tonnes, up 8.6 per cent over 494.6 tonnes in the same period last year.
golden year
Jain said that the year 2024 has been a “golden year” for gold. “All the elements around—gold being a good hedge, as a good diversifier of portfolios, from perspective of strength of central bank of countries…all those arguments have stayed put.”
“Gold has been one of the best performing asset class with 28 per cent return this year. This has been accentuated by Finance Minister Nirmala Sitaraman’s one big step of import duty cut in July from 15 per cent to 6 per cent. This has erased the black economy or gray economy in gold.”
A large part of the increase this year is in investment bar and coins demand.
The sharp cut in gold import duties in July sparked a revival in jewelery demand, which posted its strongest third quarter (July-September) since 2015 with 10 per cent increase to 171.6 tonne(155.7 tonnes).
Jain also said that the domestic gold industry witnessed a bumper Diwali and Dhanteras this year.
“Every dollar or rupee spent on gold is now going through official system. By March 2025, you will see what gold does for economic contribution to GDP etc. As WGC, this is the first time that transparency of what gold does to Indian economy will be out there. It is not just the import number. We are confident that gold will be an important contributor to the progress of our country,” Jain said.
Jain also felt that gold prices may not shoot up in 2025 at the same pace that was witnessed this year.
“Look at gold from long term perspective and it will pan out as very important asset,” he said.
SRO, Viksit Bharat
Jain also said the Self Regulatory Organization (SRO) put together by the domestic gold industry will go live in next three months.
On India’s Viksit Bharat (developed nation) goal by 2047, Jain said WGC in consultation with industry stakeholders will work towards a strategic roadmap for the gold sector and identify targets for the coming years upto 2047.