Indian jewellery demand of 101.6 tonnes in Q3 one-third lower y-o-y: WGC

New Delhi [India], Nov 5 (ANI): Gold jewellery demand in India fell to 101.6 tonnes during July to September, down 32 per cent from 148.8 tonnes in the same period of last year, the World Gold Council said on Tuesday.
The demand suffered as consumer confidence fell further over concerns around the slowing economy. Several indicators -- such as lower sales volumes reported by large fast-moving consumer goods (FMCG) companies and domestic car as well as two-wheeler sales -- pointed towards a slowdown in both urban and rural demand.
Weak sentiment due to a liquidity crunch, excessive monsoon rains in some states and the absence of any festivals also influenced demand in the Q3 quarter.
Demand received no support from the domestic price either. The gold price rally powered ahead during the quarter: it breached the Rs 35,000 per 10 gramme level in mid-July and continued climbing to Rs 38,795 per 10 gramme by the end of August before reaching an all-time high of Rs 39,011 per 10 gramme during the first week of September.
The two-month leap of about Rs 5,000 per 10 gramme -- from Rs 34,006 per 10 gramme at the end of June -- caught consumers completely off-guard, prompting many to delay buying.
Despite a correction in the final few weeks of the quarter -- due to the decrease in the international gold price and a strengthening rupee -- the impact on demand was muted as it coincided with Pitru-Paksha, an inauspicious 16 lunar day period from September 13 to 28 during which Hindus pay homage to their ancestors.
Demand was further dented by a 2.5 per cent rise in the customs duty to 12.5 per cent. This higher rate hit sentiment among both the gold trade and consumers and fresh jewellery purchases suffered as a result. Consumers preferred gold-to-gold exchanges, which accounted for an average of 50 to 60 per cent of purchases while retailers wound down existing stocks.
Wedding-related purchases provided some support during the quarter. Wedding days in the southern states of Tamil Nadu, Kerala and Karnataka supported jewellery demand during August and September.
But volumes were 15 to 20 per cent lower year-on-year due to the higher gold price. Jewellery retailers attempted to counter this by offering promotions -- such as discounts on labour charges -- but with limited impact. (ANI)