Gold miners' body World Gold Council (WGC) on Tuesday said India's gold demand could fall to a three-year low as record prices dent retail purchases by customers.
In an interview to CNBC-TV18, PR Somasundaram, managing director India, said, "Q3 has been one of the lowest. In fact, the lowest Q3 we have seen since 2005. Price has been a very big factor in this, but also the general sentiment.”
"We normally buy 80 percent in jewellery form and that continues for a long time. While bars and coins did increase from 2013 to 30 percent, but our average has been 20 percent and that is what is continuing now. However, this quarter, in particular, we have seen a sharper fall in bars and coins than jewellery, in Q3 and we do not expect this trend to change," Somasundaram said.
Somasundaram expects Q4 to be better than Q3, "Last year, Q4 was around 236 tonne. While customers are used to the new prices Rs 37,000-38,000, it still acts as a severe headwind. So, that is why we have scaled down the year’s forecast. The total year, demand should be around 700-750 tonne, we have brought it down from 750 tonne to 850 tonne and I think it will be closer to the lower end of the range."
According to the WGC report, India's gold demand slumped 32 percent to 123.9 tonne in the September quarter as higher prices and economic slowdown reduced the appetite for the yellow metal.