Gold consumption in India would probably be the best in at least a decade in this quarter, as buyers stocked up for festivals last month and the peak wedding period that followed, the World Gold Council (WGC) said.
Indians buy gold ornaments to wear and gift during weddings as the precious metal is considered auspicious, and a bringer of luck and prosperity. People were also encouraged to flock to jewelry shops by a recovery in consumer confidence as the Indian economy gradually emerged from the COVID-19 pandemic.
“Weddings have come back in a big way. Almost every day there are weddings,” WGC India head P.R. Somasundaram said in an interview.
Photo: Bloomberg
Imports have been larger this year, and prospects for overseas purchases remain positive as jewelry manufacturing continues to be very high, he said, adding that “as of now, it appears we will have another strong quarter of imports and demand.”
The outlook for consumption next year remains strong unless there is another wave of COVID-19 in the country, he said.
With very little mining and modest levels of recycling, India is heavily reliant on bullion imports to meet domestic demand.
About one-third of the imports are in the form of gold ore for processing by the country’s 32 refineries, which face challenges sourcing the ore as most do not have assured suppliers and often rely on aggregators, Somasundaram said.
Gold prices have steadied as investors weighed easing concerns over the severity of the Omicron variant of SARS-CoV-2 against an uptick in geopolitical tensions, with gold futures for February next year delivery rising by US$0.8 to US$1,785.50 an ounce on Wednesday.
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