Gold Sales in India to See Slow Growth After Three-Year Low
(Bloomberg) -- Gold bulls expecting Indians to rush back to the jewelry market after the worst year for demand in three years may have to wait.
Demand in the first half of 2020 won’t show any significant growth as consumers will take time to adjust to higher prices and financial investments will gain priority, P.R. Somasundaram, the World Gold Council’s managing director in India, said in an interview ahead of the publication of a quarterly report. The world’s second-biggest buyer may consume between 700 to 800 tons this year, compared with the 690 tons expected in 2019, he said.
Purchases will mainly pick up after June as “policy measures unfold, broader economic growth accelerates and local prices of the past six months become more acceptable among households.”
High prices, a slowdown in the domestic economy and weak consumption across sectors saw consumers shying away from gold markets last year. India’s benchmark gold futures, which rallied 25% in 2019, have extended gains to a record this month and the nation’s economy is set to grow at the slowest pace in a decade.
- Indians bought 194.3 tons of gold during the peak October to December festival period, 18% less than a year earlier.
- Net imports during the quarter also slid 18% from a year earlier to 138.5 tons, taking full-year inbound shipments to 646.8 tons, the lowest in three years
- Gold ore imports fell 23% to 211.5 tons in 2019.
- Scrap supply to continue to grow in 2020, after jumping 37% to a record 119.5 tons last year, Somsundaram said.
- Illegal shipments rose to 115-120 tons in 2019 from 90-95 tons a year earlier, he said.
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