India’s gold jewellery demand is likely to increase 17 per cent in 2017 on a bounce-back after demonetization.
India Ratings, in its latest study, forecasts India’s gold jewellery demand at 600 tonnes in 2017, which is equivalent to the last five years’ average. The World Gold Council (WGC) estimated India’s gold jewellery demand at 514 tonnes in 2016.
Shipments jumped 175 percent to 96.4 metric tons in February from a year earlier and Overseas purchases slid 32 percent to 595.5 tons in the 11 months to February.
India’s gold demand plunged 21 per cent in 2016 to 675.5 tonnes from 857.2 tonnes in the previous year 2016. Investment demand contributed 25 per cent, or 161.5 tonnes, of the total.
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Assuming investment demand at 160 tonnes, almost the same as last year, India’s overall gold demand could touch 750 tonnes in 2017.
India’s gold jewellery demand rose 3.5 per cent to 182.2 tonnes in October-December from 176 tonnes in the same quarter a year ago. Investment gold demand also rose 2.8 per cent to 61.8 per cent in October-December from 60.1 tonnes in the same period of 2015.
While annual Indian demand should recover, year-on-year growth rates will be modest, relative to historical level. Demand is estimated around 725 tons in 2017, similar to levels seen the prior year, it said. Indians buy gold during festivals and for marriages as part of the bridal trousseau or as gifts, and the nation imports almost all the gold it consumes.