India's gold demand, particularly for jewellery, increased by 22% in the March quarter to 150.8 tonnes. This was accompanied by a 6% fall in investment-related gold demand, which was at 40.9 tonnes, according to data released by the World Gold Council in its demand trend report for the quarter ended March 31, 2015.
WGC said that the March quarter is the first time since 2012 that gold demand by exchange traded funds (ETF) has shown net buying of 25.7 tones. Through 2014, demand for gold from ETFs had shown net selling.
However, the report was cautious about demand continuing in the second quarter. "One caveat to bear in mind is that the unseasonal rains and hailstorms that hit some parts of the country in late March and early April may undermine some elements of rural demand. However, the drop may not be significant during the course of the year," the report said.
Data for the report has been collected by Metal Focus; until the December 2014 quarter, the data was provided by the GFMS, Thomson Reuters.
Globally, the report noted, "Demand dipped by 1% to 1,079.3 tons in a generally quiet quarter. Growth in India and the US could not prevent a modest downtick in jewellery demand. Light inflows into ETFs, the first since 2012, boosted investments." India's total demand for gold in Q1 was 15 per cent higher at 191.7 tones while China remained world's top gold consumer with Q1 demand at 272.9 tonns though it fell by 7%.
Alistair Hewitt, Head of Market Intelligence at the World Gold Council, said, "Once again, consumers in Eastern countries dominated the market with China and India alone accounting for 54% of total global consumer demand in the quarter."
The report is also cautious on increase in gold demand in India. "A 22% increase in Indian jewellery demand was more a reflection of unusual weakness in the year-earlier period than any particular strength in Q1 2015," the report said. Report noted that despite permitting import of coins, investment demand didn't pick up, though gold continue to enter the country unofficially which resulted in premiums falling significantly.
The first quarter of last year saw a combination of factors discourage jewellery purchases, the report said, pointing to strong import curbs, impending elections that created uncertainty, and temporary restrictions on free movement of cash and assets such as gold. In comparison, conditions in the most recent quarter were far more encouraging, with demand just 3% below its five-year quarterly average of 154.7 tones, it noted.
Central banks continued to be strong buyers, purchasing119 tones in the quarter, the same volume as in Q1 2014. This was the 17th consecutive quarter that central banks have been net purchasers of gold as they continue to seek diversification away from the US dollar.
Total supply remained virtually unchanged at 1,089 tones as a 2% rise in Q1 2015 mine production to 729 tones was balanced by a 3% fall in recycling to 355 tones, compared with the same quarter last year.
No comments:
Post a Comment