At the end of June quarter, WGC had projected the annual demand to be in the range of 750 to 850 tonnes.
Chennai: Annual gold demand is likely to fall to 2016 levels as the consumption in Q3 dipped by 32 per cent. The World Gold Council has revised down its demand projection for the year by around 100 tonnes.
At the end of June quarter, WGC had projected the annual demand to be in the range of 750 to 850 tonnes. However, by Q3 the optimism diminished and WGC has brought the projection down to the range of 700-750 tonnes.
In Q3, the demand was down by 32 per cent at 123.9 tonnes and with this the total demand for the three quarters of 2019 stood at 498 tonnes. “Even if you presume the Q4 demand to be around last year levels of 236 tonnes, the total demand would be in the vicinity of 735 tonnes,’ said Somasundaram P.R., MD, India, World Gold Council.
“Our full year gold demand estimate is 700-750 tonnes, although more likely at the lower end of the range. This will be a little above the 2016 level, which faced disruptions due to jewellers’ strikes, the introduction of PAN and demonetisation,” he said.
According to him, Q3 demand weakened due to weak consumer sentiment and high prices. The increase in custom duty in the July budget from 10 per cent to 12.5 per cent also added to the prices.
Rally in gold prices made customers postpone their purchases. Gold prices breached the Rs 35,000/10g level in mid-July and continued to climb to Rs 38,795/10g by the end of August. It further moved above Rs 39,000 levels in September. Q3 demand drop this year has been significant, making it one of the lowest third quarters since 2005. Overall jewellery demand fell by 32 per cent to 101.6 tonnes and bars and coins by 35 per cent to 22.3 tonnes.
