 "Gold demand squeezed 52% in July - Sep")
Demand for gold in India dropped 52% in July – September period (Q3) of the current year at 148 tonnes as against 310 tonnes in April – June period (Q2) of this year.
The restrictions introduced by the government on importing gold through official channels had the intended effect of substantially suppressing demand, said the latest Gold Demand trends report of World Gold Council (WGC). However, the strength of Indian demand in the first half of the year means that the full year demand is still on track to narrowly exceed the 2012 total. One side effect of this was that while global recycling of gold fell 11% in Q3 compared to the same quarter in 2012, in India the recycling figure increased more than five fold to 61 tonnes.
Intervention of the government in restricting gold imports to the country is obviously reflected in the official levels of demand, but this by no means indicates that the appetite for gold in India is waning. We have seen some increases in demand in other countries which have close links with India, some of which may be making its way back to the country through illicit channels, which have reopened in recent quarters following a long period of inactivity, said Marcus Grubb, managing director – Investment at WGC.
The global demand for gold has decreased 21% during July – September (Q3) period at 869 tonnes, compared to the same period of last year. This happened mainly due to the sharp fall in the demand in gold backed ETF which had net outflows of 119 tonnes in Q3, compared to 402 tonnes in Q3 of last year. In India, the demand in ETF dropped by 71 tonnes during the period.
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Global demand for jewellery, the largest component of total demand, was 487 tonnes in Q3 2013, compared with 462 tonnes in the same period last year, an increase of 5%. The report also said that demand was particularly strong in China, where the figure reached 164 tonnes, a rise of 29%. Robust growth in the jewellery segment was also seen in West Asia, Turkey and, significantly, across South East Asia, beyond China. After eight years of decline, the US jewellery market had its third consecutive quarter of growth with a shift to higher carat items. For the 11th consecutive quarter, central banks were net buyers of gold, purchasing 93 tonnes. Meanwhile, demand in the technology sector was stable, at 103 tonnes.
Jewellery consumption in South East Asia, outside China, was also strong. Hong Kong was up 28%, Vietnam up 14%, Thailand up 57% and Indonesia up 19% in the same quarter.