Gold price `3.4L cr purchased in 2021 as easing of Covid curbs unlocks sentiment

Despite the Covid pandemic and the general slowdown within the financial system, gold demand in India surged to 797.3 tonnes valued at Rs 340,860 crore throughout the calendar 12 months 2021 indicating that customers are nonetheless pinning their religion within the yellow steel. This is an 81 per cent rise in worth phrases when in comparison with demand for 446.4 tonnes of gold price Rs 188,280 crore within the earlier 12 months, in response to World Gold Council knowledge.
The authorities had reduce customs obligation on gold and silver to 7.5 per cent from 12.5 per cent within the Union Budget for 2021-22, enabling folks to import extra gold into the nation by means of official channels. India, which depends upon imports for its necessities, imported 924.6 tonnes in 2021 – valued at Rs 4.28 lakh crore — as in comparison with 349.5 tonnes in 2020, a rise of 165 per cent, a significant drain on the nation’s overseas change reserves. Of the whole gold bought throughout the 12 months, 610.9 tonnes of gold valued at Rs 261,140 crore had been accounted by jewelry demand, an increase of 96 per cent in worth phrases. However, funding demand confirmed solely 45 per cent rise to 186.5 tonnes valued at Rs 79,720 crore.
With the easing of lockdown restrictions within the second half of the 12 months and a profitable progress of the vaccination programme, financial development altered client sentiment considerably, triggering spending and investments throughout the board throughout Dussehra and Dhanteras. This marked a outstanding restoration with many retailers reporting report gross sales volumes above even these of pre-pandemic ranges and imports and exports rising in tandem. With extra weddings but muted celebrations, increased financial savings and pent-up demand boosted jewelry market.
“The spurt in demand that is, in part, a result of pent-up demand in Q4 is less likely to be repeated this year, though the revival will continue to set a new normal above pre-pandemic levels. The next few years starting with 2022 will be years to watch for the effect of policy reforms, technology and industry collaboration to let gold evolve into a more transparent mainstream asset class,” stated Somasundaram PR, Regional CEO, WGC. Full report