India’s gold imports rose 5% at 802.8 tonne on a year-on-year basis in 2024 due to high investment demand and big purchases by the Reserve Bank of India, according to the latest data by the World Gold Council.
However, high prices dented jewellery demand by 2% to 563.4 tonne.The total investment demand for 2024 increased by 29% to 239.4 tonne and in the December quarter up 14% to 76 tonne.
Gold investment gained momentum due to “rising gold prices and relatively lacklustre performance of other assets, with domestic stock markets generating mediocre returns in first half of the year and ending the year with a notable downward correction after touching record highs in the September quarter”, the report said.
What is notable is at high prices customers are encashing gold with cash which has increased 16% to 29.6 tonne in the December quarter. The Reserve bank of India (RBI) added a whopping 73 tonne – four-and-a-half times higher than 16 tonne in 2023 – to its foreign exchange reserves. The share of gold in forex reserves rose to its highest ever at 11%.
Gold jewellery demand in 2024 has to be seen from the perspective of record-high gold prices. The international spot gold price is around a record high of $2,866 per ounce. In Mumbai’s wholesale market, standard gold (995 purity) was Rs 83,985 per 10 grams. Pure gold (999 purity) was trading at Rs 84,323 per 10 grams while silver was `95,421 per kg.
India’s fourth quarter jewellery demand was 5% lower at 189.8 tonne as against Q4FY23 due to continued strength in the gold price. Full-year demand was 2% lower at 563 tonne. The report stated that demand in the fourth quarter was concentrated between late October – the peak Diwali festival buying season – and November, when the gold price saw a notable correction coinciding with the onset of the wedding season.
Sachin Jain, regional CEO, India, World Gold Council said, “The increase in India’s gold investment demand, the highest since 2013, is reinforcing gold’s status as a safe-haven asset. This was further enhanced in major metropolitan cities by e-commerce platforms offering rapid delivery of small gold investment bars and coins. Our outlook for 2025 gold demand is between 700-800 tonne.
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