India's Gold Demand Rises Despite Historic High Prices

On 30th April, 2024, India's gold demand witnessed an 8% annual increase to 136.6 tonnes in the March quarter, driven by a robust economic environment and aggressive buying by the Reserve Bank of India (RBI), according to the World Gold Council (WGC).

Key Points

Gold Demand Growth: Despite historic high prices, India's gold demand surged, with total demand, including jewellery and investment, reaching 136.6 tonnes in January-March 2024, up from 126.3 tonnes in the same period last year.
Jewellery Demand: Jewellery demand rose by 4% to 95.5 tonnes, while investment demand grew significantly by 19% to 41.1 tonnes.
Economic Support: Regional CEO of WGC India attributed the rise in gold demand to India's strong macroeconomic environment, despite March's historic high gold prices causing a sales slowdown.
Outlook: CEO of WGC India expects India's gold demand for the year to be between 700-800 tonnes, with potential variations depending on price trends.
Factors Driving Demand: CEO of WGC India highlighted a reversal in market behaviour, with Indian and Chinese markets responding to increasing gold prices.
Continued RBI Buying: The RBI purchased 19 tonnes of gold in the first quarter of 2024, following its acquisition of 16 tonnes throughout 2023, signalling continued interest in gold acquisitions.
Import and Recycle Trends: Total gold imports in Q1 2024 increased by 25%, while gold recycling rose by 10% compared to the previous year.
Price Trends: The average quarterly price in Q1 2024 was Rs 55,247.20 per 10 grams, reflecting an increase from Q1 2023.
Investment Trends: Positive inflows into gold ETFs and increased demand for gold bars and coins contributed to overall demand growth in Q1 2024.