Investments in gold bars and coins touch 55 tonnes in India; highest since 2015

Gold Investment: Purchase of gold bars and coins touched 55 tonnes in the third quarter of the calendar year. This is the highest since 2015, according to a World Gold Council (WGC) report.

World Gold Council Report

The demand for gold bars and coins jumped 20% during the July-September quarter versus the same period last year. It was aslo 38% higher than its five-year quarterly average of 40 tonnes.

"Investors reacted to the downward correction in the gold price from its Q2 record high, adding to their holdings in the expectation of a price recovery in Q4 as the wedding and festive season gets underway," noted the report.

Also Read: Festive Season 2023: Gold demand may dampen as prices rally, says World Gold Council

As per the data, the global gold demand between July-September 2023 was 8% ahead of its five-year average, but 6% weaker year-on-year (YoY) at 1,147 tonnes. Meanwhile in India, the overall gold demand rose 10% to 210.2 tonnes during the third quarter of this calendar year.

"In the last quarter, as prices softened a bit, more people were waiting to buy gold and bought more bars and coins instead of jewellery. Therefore there was a 20 per cent jump in demand for bars and coins in Q3," WGC India Regional CEO Somasundaram PR said

This quarter saw a soft start, which can be attributed to Adhik Maas, which is viewed as inauspicious for making new purchases. However, festivals like Onam and Varalakshmi Nombu during August and September improved the sentiment.

This helped South India outperform other regions. North India was the weakest and saw a yearly decline, partly reflecting a weaker rural sector and a relative lack of major festivals during the quarter.

An elevated gold prices, increased the popularity of lower-carat gold like 18K and 14K. Somasundaram also said that with the first nine months' demand at 481.2 tonnes, the full-year 2023 gold demand would be in the range of 700-750 tonnes, marginally lower than the 774 tonnes demand in 2022.

Gold demand may fall in December

Meanwhile, another report by World Gold Council has indicated that higher prices could cut back the purchases in December. The demand for gold usually becomes strong towards the end of the year, as people believe buying gold during Dussehra and Diwali is auspicious. However the price rise has dampened the demand for Gold.