Gold demand in India can go up to 900 tonnes this year
Mint. However, a pick up in the purchase of gold is expected during the second half of the year, as good monsoons are likely to see a spurt in the demand for the yellow metal and as consumers adjust to higher prices, Somasundaram said. "There is going to be a spurt in demand for gold after general elections, as people will have more money in hand," he added.
The demand for gold in India stood at 745.7 tonnes during 2023, down 3% from the previous year, as gold prices rose to a record high during the year, the WGC said in a recent report. Interestingly, demand for the yellow metal was at a four-year low during 2023. India is a major importer of gold.
Switzerland, the United Arab Emirates, Peru, and Ghana are leading gold suppliers to the South Asian country. "I believe there is a strong demand now, but people want to be more comfortable with the price levels. They want a little more stability in prices," he said.
"Now, of course, if there is a price drop, you will have a significant addition to demand, but I think India has moved up by another 100 tonnes (during 2023) in a normative level," Somasundaram added. Gold prices have seen high volatility during 2023 amid geopolitical conflicts, slowing growth in advanced economies and monetary tightening by central banks amid high inflation. However, major central banks are expected to cut rates in the second half of the year, which is likely to lead to an increase in demand for the yellow metal.
On Thursday, the price for 10 grams of gold stood at about ₹63,000- ₹64,000. Earlier in 2023, gold prices crossed the ₹65,000 mark (for 10 gm), up from ₹52,000 to ₹53,000 in 2022. The trajectory is looking high, particularly for India, Somasundaram said.
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