India’s gold demand jumped 30 per cent in the first half of 2017 on robust buying towards the end of the April-June quarter, according to the World Gold Council (WGC).
India’s gold demand during January-June jumped to 298.4 tonnes from 229.4 tonnes in the corresponding period of the previous year. Investment demand was 73 tonnes, taking total demand to 371 tonnes.
“We have forecast gold demand of 650-750 tonnes for the entire year,” said Somasundaram PR, managing director, India, WGC.
While the concerns of a higher goods and services tax remained, sentiment improved on expectation of a good monsoon. This was evident in sales during Akshaya Tritiya and a relatively higher number of auspicious wedding days during the quarter.
The WGC estimates India’s investment gold (bars and coins) demand at 72.7 tonnes in January-June, up from 59.8 tonnes in the same period last year.
“With transparency of the GST, demand for sovereign gold bonds, bars and coins will increase,” said Somasundaram.
“The time is right to cut the import duty to reduce illegal gold imports. The GST will change consumer behaviour with more people buying bars and coins,” he added.
Global gold demand, according to the WGC, fell 10 per cent to 953.4 tonnes in April-June, on a 34 per cent fall in investment demand. Central banks increased their quarterly demand by 20 per cent to 94.5 tonnes.
China’s investment demand increased but jewellery demand was lacklustre.
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