Ahmedabad: Despite a sharp spike in gold prices from January to March this year, the demand for the yellow metal remained upbeat during the quarter in Gujarat. Against a 17% decline in gold demand in India during the quarter according to the World Gold Council, gold imports in Gujarat grew 75% during the same period.
According to the latest report by the World Gold Council, India’s gold demand declined to 112.5 metric tonne (MT) in January to March 2023, down 17%.
Against this, gold imports in Gujarat stood at 14.69MT during the same period, up 75% as compared to 8.39MT in the corresponding period in 2022, according to Ahmedabad Air Cargo Complex (AACC). Gold price stood at Rs 63,300 per 10 gram in the Ahmedabad market on Thursday.
Analysts attribute the growth to wedding season demand and also investor demand.
“In Gujarat, the wedding season was one of the biggest drivers for jewellery sales. Due to high prices, a lot of transactions took place by exchanging old gold. However, overall sale of gold remained upbeat. Moreover, investors have a strong faith in gold as an asset class and anticipating rise in prices, many had invested in bars and coins during the period. As a result, gold demand in Gujarat remained significantly upbeat,” said Haresh Acharya, director, India Bullion and Jewellers’ Association (IBJA).
Pan India, gold demand declined mainly because of muted demand triggered by high prices. “In India, the demand (for gold) has been very soft. There is a 17% drop in the Indian demand for both jewellery and bars and coins. It is largely due to the very high price. On top of it, volatility in prices also affected,” said Somasundaram PR, regional CEO, (India), World Gold Council.
“The record high and volatile gold prices affected sentiment and gold jewellery demand dropped to 78 tonnes from 94.2 tonnes in Q1 2022 with little support from the investment side,” he further added.