Gold Demand Seen Resilient as Indians ‘Learn to Live With Virus’
Buyers in the second-biggest consumer of gold are “learning to live with the virus,” according to the World Gold Council.
(Bloomberg) -- Gold demand in India will be resilient against the latest onslaught of Covid-19 cases as buyers in the second-biggest consumer “learn to live with the virus,” according to the World Gold Council.
While regional governments across the country have imposed some curbs on economic and other activities to contain the latest surge in infections, restrictions have been less stringent. That’s helping gold sales, which are expected to have bounced back in 2021 after having been hammered for almost two years as the coronavirus led to the postponement of many weddings, a key source of demand.
“There was lot of uncertainty,” when infections started spiking, but cases are now coming down, P.R. Somasundaram, regional chief executive officer for India at the council, said in an interview with Bloomberg TV. “I don’t think the third wave has affected demand. As a country, I think we have moved on to live with the virus.”
Forecasters expect India’s sudden omicron-led virus wave to peak by end-January, as new cases show signs of ebbing in some states after surging more than 32-fold within a month.
There was a “huge spurt” in demand in the last quarter of 2021, as millions of weddings took place, prices softened and higher savings flowed into the precious metal as people couldn’t travel much, he said.
Purchases in India typically peak in the October to December quarter, when some of the biggest festivals in the Hindu calendar coincide with the wedding season. The World Gold Council has previously estimated sales in the period last year will be the best in at least a decade.
Here are some more comments from Somasundaram on the Indian gold market:
- Interest in India’s gold-backed exchange-traded funds has picked up
- India’s international bullion exchange is likely to start operations soon, following some changes to the taxation structure in the first half of the year
- Trading in domestic spot contracts is likely to start in the second half
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