India glitters in gold, buys 51% more than China in 3 months

In a mere three months – July to September 2024 – Indians purchased 248.3 tonnes of gold, 51 per cent more than 165 tonnes bought by the people in China during the period.

As per the latest data by World Gold Council, Indians mostly purchased gold in form of coins and bars.  

Also, India’s demand for the yellow metal surged 18 per cent on a year-on-year basis in July-September.  

Why Indians gold buying has surged

The increase in demand for gold is majorly due to the slash in import of the yellow metal from 15 per cent to 6 per cent. The announcement for this was made by Finance Minister Nirmala Sitharaman during her Union Budget 2024-25 speech on July 23.

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Also, there has been revenge buying, where there is a sudden spike in the purchase of a commodity by consumers after they are denied the opportunity for an extended period of time.

Wedding, festive demand

“India’s gold demand remains solid in Q4 due to Dhanteras and wedding demand,” a report by Economic Times quoted  Sachin Jain, regional CEO (India) of World Gold Council, as saying.

“Although with the continued rise in the gold price offsetting the impact of the duty cut, we may see an increased trend for investors to wait for price corrections as opportunities to add to their holdings,” he further said.  

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Indians bought gold coins, bars

In the July-September quarter, Indian consumers purchased 77 tonnes of gold coins and bars as against 62 tonnes bought by the Chinese.

“India’s bar and coin demand jumped to its highest in the July-September quarter since 2012. The July duty-led price correction accelerated investor optimism and bullish price expectations, which allowed many investors to enter the market,” Jain was quoted as saying in the ET report.

Jain also informed that the momentum in consumer demand picked up sharply towards July end and remained strong till mid-September. “There was a 41 per cent increase in investment demand,” he added.

10% Y-o-Y increase in demand for gold jewellery

The demand for gold jewellery in India during July-September 2024 increased by 10 per cent to 171.6 tonnes from the year-ago period.

The demand for gold in the July-September quarter peaked despite the average price of the yellow metal being higher at Rs 66,614 per 10 gm compared to Rs 51,259.80 per 10 gm during the same period last year.

Strong demand forecast for gold

Gold is in a bull run in the backdrop of a volatile equity market due to the 2024 US Presidential election and escalating tensions in West Asia.

However, Jain said: “We expect full-year gold demand to be in the range of 700-750 tonnes."  

For the unversed, India has twice surpassed China in overall gold demand in the last eight quarters. It was in October-December quarters of 2022 and 2023.