India Gold Demand Forecast to Remain 'Feeble' Until September This Year

SEATTLE (Scrap Monster): The All India Gem And Jewellery Domestic Council (GJC) announced that the demand for gold is unlikely to see major revival until September this year, even as stores started to reopen after the extended lockdown in the country due to Covid-19 pandemic spread. The shops in the country had remained closed in most of April and May, with sales hitting the lowest level in recent times.

According to Shankaar Sen, vice chairman, GJC, the demand for gold had already slowed down due to high gold prices. The shutdown on account of the lockdown dragged the sales to nearly zero. The sales were negligible even during Akshaya Trithiya- the auspicious occasion to buy gold as per Hindu tradition. Incidenatlly, the gold imports by the country had nosedived by almost 99% in May this year.

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Although purchases may start recovering in the month of June, jewellers are still waiting for festival season in the third quarter of the year for gold sales to gain momentum. The near-term prospects do not augur well for the gold sector, especially due to hit on disposable income due to economic recession. The footfalls in retail outlets have been negligible so far, jewellers noted.

The pandemic has resulted in huge revenue loss for jewellers. The profitability has hit the bottom. This could create further liquidity pressure and thereby dampen the borrowing capabilities.