A woman is reflected in a mirror as she tries on a necklace at a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata April 21, 2015.Reuters

Driven by robust demand for jewellery, gold demand in the country is estimated to touch a four-year high in the second half of 2015. 

The World Gold Council (WGC) forecasts India's gold demand to reach 900-1,000 tonnes in the calendar year 2015, with the demand in the second half likely to be at least 554 tonnes.

Demand for the yellow metal was 481 tonnes during the July-December period in 2012, but since then, it has declined steadily. In the second half of 2014, demand was 439 tonnes.

Demand for the yellow metal stood at 346.2 tonnes during the first six months of 2015. 

"Jewellery demand has remained robust so far in the second half," Mehul Choksi, managing director, Gitanjali Gems, told Business Standard.

Gold prices have seen high volatility in the past two months, as the US dollar strengthened on expectations of US central bank rate hike in September.

At one stage in early August, gold prices were trading at a five-and-a-half-year low of Rs 24,577 per 10 gm, but later rebounded sharply to hit a three-month of Rs 27,575 this week. The rise was mainly led by increased demand from jewellers and a falling rupee.

"Stockists' demand was high in July as jewellers were preparing for the India International Jewellery Show in the first week of August. But the demand tapered off. With the festive and wedding seasons, we see strong demand for gold in the second half," said Rajan Venkatesh, managing director, India bullion, ScotiaMocatta.

Consumer demand for gold in India, which declined by 25% to 154 tonnes in the April-June period, is expected to see a pick up ahead of the wedding and festival seasons in the second half of 2015. 

"Gold demand will be robust in the second half due to the upcoming wedding and festival seasons. The season started with consumers taking advantage of softening gold prices," said Somasundaram PR, managing director (India), WGC.

However, a poor monsoon rainfall is expected to dampen the prospects of gold demand in rural India, which account for a significant part of overall gold consumption in the country.

"The worry is the weak monsoon, which may lower farm output. Rural demand could be affected, but the overall demand for gold is likely to remain reasonably strong during July-December," Venkatesh said.

Also read
Quick Links