Price of Gold fell down Rs 140 in
the markets quoting at Rs 28,140 per 10 grams in Delhi on weak cues
from the global markets, amid subdued demand from jewellers.
Gold demand about 40% lower in the last
quarter
In the time period of April-June 2014,
the never-ending demand for Gold slumped 39 percent coming down to
204.1 tonne from the last record at 283.7 tonne in the first calendar
quarter of 2014. World Gold Council (WGC) said, "India's
demand for the precious yellow metal fell in the second calendar
quarter as investors are hoping see a fall down in the high prices of
the commodity."
On yearly comparison, the second calendar
quarter standing at the demand of 204.1 tonne of Gold in 2014,
demanded 133 tonne more last year as the consolidated demand of the
same quarter in 2013 was 337.0 tonne. India's demand for Gold
declined 41 percent in Rupee values over the corresponding quarters
in the second quarter of the 2014 over 2013. Value of the gold
demanded slipped from Rs 85,533.8 crore in April-June 2013 to Rs
50,564.3 crore in the same time frame.
Managing Director of
WGC's Indian branch Somasundaram PR said, "The potential buyers
of the commodity hoped to acquire gold at the price levels of Rs
25,000 but the uncertain rates due to election of new government
tamed down the demand for the quarter." According to
Somasundaram's the fall in demand is temporary and the only reason
for the steep decline is attributing to higher expectations of
investors from the government to lower Gold price by easing
restrictive norms. Further, the next quarter will show a clearer
picture of the demand curve. On the other hand, he pointed out to a
little hope that India is able to curb the high rising demand for the
commodity.
"However, when we look at the long-term
averages and compare them on review of the preceding five years,
Gold's demand in the time frame considered, i.e. Q2 of calendar year,
remained high eradicating the changes in policies and other economic
factors which encouraged other saving options," Somasundaram
added. The precious metal is useful aesthetically in
creating precious jewelery in India. Jewelers demand for the
commodity dropped from 188 tonne to 154.5 tonnes equal to 18 percent
in the Q2 of calendar year 2014.
In terms of rupee, the
demand from jewelers fell by more than 20 percent as it recorded sale
of Rs 47,716.2 crore in consolidated period in 2013 and Rs 38,269.5
crore this year. In investment view, the consolidated demand
for the quarter came down 67 percent which equals 49.6 tonne holding
investors demand at 149 tonnes. In currency valuation, gold demand
for the quarter fell from Rs 37,817.6 crore recorded in Q2 of 2013 to
Rs 12,294.8 crore in the same duration this year. "We
believe that as the price of gold is leveling to a steady rate and
governance in stabilized in the country, the demand is going to tip
up in the third quarter," said Somasundaram.
Other
reasons which might raise gold's demand in the Indian market include,
the positive influx from monsoon outputs and the upcoming wedding
season when demand from jewelers generally rises. India is
having about 22,000 tonne of gold which accumulates over a trillion
US dollars, Somasundaram said, adding therefore, as a developing
economy the country can use the resources for growth in various
sectors.
