By Rajendra Jadhav
MUMBAI (Reuters) – India’s gold demand is anticipated to rise within the June quarter from a 12 months in the past resulting from the next variety of auspicious days for weddings and a fall in native costs forward of a key competition, the World Gold Council mentioned on Thursday.
An increase in consumption by the world’s second-biggest gold client might assist world costs, at present hovering close to a Four-month low, however might widen India’s commerce deficit and put stress on the rupee.
“Costs are enticing. Within the second quarter we’d see a surge in demand resulting from Akshaya Tritiya and better auspicious days for weddings,” mentioned Somasundaram PR, the managing director of WGC’s Indian operations.
Weddings are one of many largest drivers of gold purchases in India as bullion within the type of jewelry is a vital a part of the bride’s dowry and in addition a well-liked reward from household and company.
This 12 months the contribution to gross sales from weddings might rise because the Hindu calendar reveals 37 auspicious dates for weddings from simply 21 within the second quarter a 12 months earlier, up 76 %, Somasundaram mentioned.
Indians may even rejoice Akshaya Tritiya on Could 7, when shopping for gold is taken into account auspicious.
Gold consumption within the second-quarter final 12 months got here in at 189.2 tonnes, the WGC mentioned in its report.
Within the first quarter of this 12 months, consumption rose 5 % from a 12 months in the past to 159 tonnes, additionally buoyed by extra auspicious days for weddings and decrease costs, it mentioned.
The report forecast India’s gold consumption in 2019 at 750 to 850 tonnes, from 760.Four tonnes final 12 months and a 10-year common of 838 tonnes, the WGC mentioned. Gold consumption fell final 12 months after an increase in native costs resulting from a weak rupee and as drought hit rural demand.
Somasundaram additionally pointed to a latest drop in gold smuggling over worries that illicit shipments might be caught in seizures of money, bullion, alcohol and medicines which might be geared toward controlling vote-buying within the nation’s nationwide elections.
India’s political events and their supporters usually supply cash or items in alternate for votes.
The Election Fee, which is monitoring polling, tries to stop this by establishing freeway checkpoints to grab money and different high-value gadgets that candidates keep away from mentioning of their bills resulting from a cap on the quantity they’ll spend.
Nonetheless, he mentioned smuggling might thrive once more after the election resulting from a 13 % hole between native and abroad costs due to India’s import and gross sales taxes, and expectations of wholesome demand.
Round 93-95 tonnes of gold was smuggled into the nation in 2018, down from 118 tonnes a 12 months earlier, the WGC estimated.
(Reporting by Rajendra Jadhav; modifying by Richard Pullin)