India's gold demand has increased by 22% in the last quarter of the financial year 2014 - 15 to 150.8 tonnes. This is along with a 6% fall in investment-related gold demand, which is at 40.9 tonnes, according to the data released by the World Gold Council in the report regarding demand trend for the quarter ended March 31, 2015.
“India’s gold demand during the first quarter of 2015 was up 15 per cent compared with the corresponding quarter last year, though it is still below the 5-year average. This growth is a reflection of the muted demand in the same period as last year due to crippling gold import policies, coupled with weak economic sentiment and trade uncertainty at the time of the general elections,” WGC Managing Director, India, Somasundaram PR told. "Every quarter is going to be higher than the previous ones this year because GDP growth is expected to be higher and gold prices have come down," he added. "Notwithstanding the unseasonal rains in the early part of the calendar year, which will impact the rural economy, we expect the full-year demand in the range of 900-1,000 tonnes," he added.
The jewellery demand for Q1 grew by 22 per cent to 150.8 tonnes when compared with 123.5 tonnes the previous year. In terms of value, jewellery demand stood at Rs 36,761.4 crore, an increase of 16 per cent from Rs 31,706.4 crore in Q1 last year. Investment demand for gold declined by 11 per cent to Rs 9,969.2 crore from Rs 11,192.2 crore in the first quarter of 2014. The total gold recycled in India also went down by 40 per cent to 18 tonnes in Q1 of 2015, when compared with 30 tonnes a year ago.
"Due to certain restrictions, sales of bars and coins have faced a lot of headwinds and a part of investment demand has moved to jewellery," said Somasundaram. He said, following the partial removal of the import curbs (with the exception of a duty reduction) and the Budget announcements introducing new gold products, the environment for gold has been encouraging in the past few months, resulting in buying behaviour slowly returning to normalcy.