India's Gold Demand Dip Amid Record Prices Despite Value Growth

India's gold demand fell 5% to 149.7 tonnes in the June quarter due to record-high prices, as reported by the World Gold Council. Despite this decline, the value of gold demand rose 17% to Rs 93,850 crore. Gold prices and consumer sentiment were influenced by various factors such as high local prices, general elections, and a severe heatwave.

India's gold demand fell by 5% to 149.7 tonnes for the quarter ending in June, attributed primarily to record-high prices, according to a World Gold Council (WGC) report released Tuesday. In contrast, the value of gold demand surged by 17% to Rs 93,850 crore compared to Rs 82,530 crore in the same period last year.

Price hikes were stark; 24-carat gold prices soared past Rs 74,000 per 10 grams. The average price in U.S. dollar terms was USD 2,338.2, up from USD 1,975.9 in the same period last year. Meanwhile, the quarterly average price in rupee terms also increased, reaching Rs 62,700.5.

Overall, investment demand saw a robust increase of 46% to 43.1 tonnes. However, jewellery demand suffered, plunging 17% to 106.5 tonnes due to high prices, election periods, and a severe heatwave. India's gold recycling also declined by 39% as consumers chose to exchange old jewellery for new pieces. Looking forward, reduced import duties and a positive economic outlook may boost future demand.

(With inputs from agencies.)