In 2019, the gold demand stood at 690.4 tonnes compared to 760.4 tonnes in 2018- a drop of 9 per cent, as per the World Gold Council data.
Chennai: Higher prices and weak rural economy brought down gold demand below 700 tonnes in 2019. Recycling went up 37 per cent, while import dropped 14 per cent during the year and the grey market continued to be robust.
In 2019, the gold demand stood at 690.4 tonnes compared to 760.4 tonnes in 2018- a drop of 9 per cent, as per the World Gold Council data. The market saw the demand coming below 700 tonnes last time in 2016 to 666 tonnes when the excise duty hike and demonetization hit the sentiments. Before that, the demand fell to 642 tonnes a decade back in 2009. Usually, India’s gold demand hovers around 800 tonnes.
“The gold price hike in the second half of the year saw demand coming down by 22 per cent against 7 per cent increase in the first half. Besides, the rural economy was down and slower income growth hit the buying capacity of the consumers,” said Somasundaram P.R., managing director, India, World Gold Council.
Jewellery demand was down by 9 per cent at 544.6 tonnes as compared to 598 tonnes and investment demand declined by 10 per cent to 145.8 tonnes in comparison to 162.4 tonnes in 2018.
In fact, demand in all the key gold consuming markets were down except Egypt and Turkey and China saw the demand falling by 15 per cent, he added.
However, WGC expects the demand to rebound in 2020 to 700 – 800 tonnes.
Meanwhile, the grey market remained active and the quantum of smuggled gold went up from 90-95 tonnes in 2018 to 115-120 tonnes in 2019.