Gold demand is likely to touch 800-850 tonnes in 2022 in India after a sharp surge in the fourth quarter of last year due to pent-up demand and an improvement in consumer confidence, according to the latest report by the World Gold Council (WGC).
Demand for gold rose sharply by 85% year on year(YoY) in the fourth quarter (October – December) of last year to 343.9 tonnes, with demand for jewellery increasing by 93% to 265 tonnes.
The nation also imported 924.6 tonnes of gold in 2021 as compared to 349.5 tonnes in 2020 — an increase of 165%.
The market development organization for the gold industry reports that the spurt in demand, in part a result of pent-up demand in Q4, is less likely to be repeated this year, though the revival will continue to set a new normal above pre-pandemic levels.
WGC reports that Q4 marked a remarkable recovery with many retailers reporting record sales volumes above even those of pre-pandemic levels, and imports and exports rising in tandem. More weddings with muted celebrations, higher savings and pent-up demand boosted jewellery market.
Somasundaram PR, managing director of WGC(India), said Indians brought more gold at higher prices in 2021.
“2021 revalidated the strength of conventional wisdom about gold and holds several lessons in revival that will shape policy thinking for years to come. India’s gold demand recovered by 79% to 797.3 tonnes in 2021 chiefly a result of an exceptional Q4 demand of 343 tonnes that surpassed even our most optimistic expectation articulated in Q3 and turned out to be the best quarter in our recorded data series,” he said.
“For 2022, Covid-19 and its future variants will remain a factor to watch as will price movements in gold, given global concerns on inflation, interest rate and geo-political developments. The next few years starting with 2022 will be years to watch for the effect of policy reforms, technology and industry collaboration to let gold evolve into a more transparent mainstream asset class,” he added.
Total jewellery demand in India for 2021 was up by 93% to 610.9 tonnes as compared to 315.9 tonnes in 2020.The value of jewellery demand in 2021 was Rs 261,140 crore, up by 96% from Rs 133,260 crore seen in 2020.
Source:FE