Somasundaram PR, Managing Director of the World Gold Council’s (WGC) Indian operations, told Reuters on Thursday, that the demand for gold from India is likely to reduce from the previous year during the festivals in the December quarter, in the wake of a surge in the Indian gold prices to five-year highs.
Key Quotes (via Reuters):
“Demand is expected to be muted due to a steep rise in prices. It is likely to be at the lower end of the 700 to 800 tonnes range.”
“This year’s seasonal increase could be moderate, though, due to a liquidity crunch, rising local prices and impending elections in some key states that could impact trade logistics.”
“Monsoon rainfall was deficient in some pockets of the country and that could hurt demand as well.”
“Demand for gold coins and bars, also known as investment demand, rose 11 percent in the quarter to 34.4 tonnes as the volatility in the stock market and lower prices lured investors.”
“But investment demand could moderate again in the December quarter due to higher prices.”
“Normally stock market volatility helps gold demand but now higher prices are working as an entry barrier.”
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