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India’s gold demand, particularly for jewellery, increased by 22% per cent in the March quarter to 150.8 tonnes. This was accompanied by a 6% fall in investment-related gold demand, which was at 40.9 tonnes, according to data released by the World Gold Council in its demand trend report for the quarter ended March 31, 2015.
WGC said that the March quarter is the first time since 2012 that gold demand by exchange traded funds (ETF) has shown net buying of 25.7 tones. Through 2014, demand for gold from ETFs had shown net selling.
However, the report was cautious about demand continuing in the second quarter. “One caveat to bear in mind is that the unseasonal rains and hailstorms that hit some parts of the country in late March and early April may undermine some elements of rural demand. However, the drop may not be significant during the course of the year,” the report said.
Data for the report has been collected by Metal Focus; until the December 2014 quarter, the data was provided by the GFMS, Thomson Reuters.
Globally, the report noted, “Demand dipped by 1% to 1,079.3 tonnes in a generally quiet quarter. Growth in India and the US could not prevent a modest downtick in jewellery demand. Light inflows into ETFs, the first since 2012, boosted investments.”
The report is also cautious on increase in gold demand in India. “A 22% increase in Indian jewellery demand was more a reflection of unusual weakness in the year-earlier period than any particular strength in Q1 2015,” the report said.
The first quarter of last year saw a combination of factors discourage jewellery purchases, the report said, pointing to strong import curbs, impending elections that created uncertainty, and temporary restrictions on free movement of cash and assets such as gold. In comparison, conditions in the most recent quarter were far more encouraging, with demand just 3% below its five-year quarterly average of 154.7 tones, it noted.
