India Gold Sales in Festival Quarter to Hit Rock Bottom Level

SEATTLE (Scrap Monster): The jewellers in India are likely to witness lowest level of sales in the past twelve years during the festival quarter. The Covid-19 pandemic has badly impacted the ability of customers to purchase gold.

According to Chirag Sheth, a consultant at London-based Metals Focus Ltd., the outbreak of the virus and weak economic growth are likely to push sales to the lowest quarterly numbers since 2008. It must be noted that the country often reports huge surge in gold sales during the quarter ending December 31st, mainly on account of wedding season and festive demand. Sheth pointed out that urban gold demand is likely to witness huge fall, due to massive loss in employment. However, rural demand is likely to remain strong, he added.

ALSO READ: Refinitiv Foresees Robust Demand for Gold as a Safe-Haven Asset

The demand for gold jewelry, coins and bars are likely to fall to a multi-year low in the full-year 2020, said P.R. Somasundaram, managing director for India at the World Gold Council. The last quarter performance is likely to remain better when compared with the prior quarters of the year.

Meantime, gold price premium in the country dipped ahead of Diwali. The premiums charged by gold dealers over official domestic prices dropped from $5 per ounce last week to $1 per ounce this week. The domestic gold prices have dropped significantly from record highs hit a few months before.