India Gold Demand Poised to Touch the Lowest Level in Three Decades

SEATTLE (Scrap Monster): The annual gold demand in India is likely to fall drastically in 2020. The gold consumption levels are projected to hit the lowest level in almost three decades. Upon comparison with 2019, the yearly demand is expected to decline by almost half.

The anticipated fall in demand may likely limit the rally in international gold prices. Meantime, the situation may help the country’s economy by cutting the trade deficit. Furthermore, it may lend support to falling domestic currency against dollar.

According to N. Anantha Padmanabhan, chairman of the All India Gem and Jewellery Domestic Council (GJC), the closure of retail stores on account of lockdown, especially during wedding season and key festivals, has resulted in nearly zero gold sales in the country. The gold consumption in the country is expected to range between 350 tonnes and 400 tonnes, as compared with 690.4 tonnes in the previous year. This is the lowest consumption level since 1991, he said.

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The trade body fears that slowdown in economy and fall in consumers’ disposable incomes may keep the demand subdued, even after the lifting of the lockdown. The gold demand in the country has been on a decline even before the lockdown restrictions, mainly due to record high prices for gold. Incidentally, gold prices have surged higher by almost 20% so far in 2020, after sharp gain recorded in 2019.