WGC Foresees Soft Gold Demand in India During H2 2020

The government needs to announce additional economic packages to boost economic growth, it noted.

SEATTLE (Scrap Monster): According to a report published by the World Gold Council (WGC), the consumer demand for gold in India is expected to remain subdued in the second half of 2020. However, stimulus packages to support the economy, coupled with anticipated good monsoon may soften the impacts caused by the economic turmoil.

The ‘Gold Mid-Year Outlook 2020: Recovery Paths and Impact on Performance’ report noted that the country’s economic growth stalled during the initial quarter of the year to 3.1%, which is the lowest level in nearly 11 years. The reduced economic activity, along with rising unemployment and loss of income are likely to impact demand for the yellow metal. The government needs to announce additional economic packages to boost economic growth, it noted.

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Somasundaram P.R, Managing Director-India, WGC stated that economic contraction will directly result in lower demand for gold jewellery in the country, especially on account of lack of weddings and celebrations in line with pandemic control protocols. Meantime, behavioural changes in consumers will be more impactful. The current high gold prices will continue to act as an entry barrier, he added.

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