Domestic gold demand rises by 9 per cent, global demand falls

Nikita Singh
/ Categories: Trending, Markets

Whilst the global demand for gold slumped by over 7 per cent to 4,071.7 tonne in 2017 against 2016, demand for gold in India increased by 9.1 per cent to 727 tonne in 2017 as compared to the previous year.

 

The demand for gold had witnessed a significant set back in the last two months of 2016 due to demonetisation imposed by the government. In 2017, the demand for gold rose majorly on the back of low prices during Dhanteras, slightly better economic environment and improved consumer sentiment in the rural areas as compared to 2016, according a report by the World Gold Council.

 

The removal of anti-money laundering regulation and Prevention of Money Laundering Act (PMLA) from the jewellery segment also became one of the significant drivers of the domestic gold demand. The demand for gold jewellery surged by 12 per cent to 562.7 tonnes in 2017 as compared to 504.5 tonne in 2016. In terms of value, the gold investment demand dropped by one per cent in 2017 from Rs. 43,650 crore in 2016.

 

The demand for gold is expected to rise in the current year as well, as the adverse impact of GST implementation is expected to wither away. Further, positive developments in context of gold including the development of a comprehensive policy and the establishment of gold exchange are likely to prove beneficial for the value of gold.


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