Gold demand in India seen falling to lowest in 8 years in 2017
MUMBAI: India’s gold consumption is prone to drop to its lowest in eight years in 2017, hit by authorities strikes to make bullion buying and selling extra clear and by faltering demand from some rural areas, the World Gold Council (WGC) mentioned on Thursday.
Proof of weaker urge for food in a rustic the place gold is utilized in every thing from funding to marriage ceremony items may drag on world costs which were hovering close to their highest in three weeks. India is the phrase’s No.2 shopper of gold behind China.
Indian demand is prone to be round 650 tonnes in 2017, in comparison with a 10-year common of 845 tonnes, Somasundaram PR, Managing Director of WGC`s India operations, instructed Reuters. Demand was 666.1 tonnes in 2016.
“Within the September quarter, the newly launched Items and Companies Tax (GST) and anti-money laundering laws round jewelry retail transactions deterred gold consumers,” he mentioned.
As a part of a brand new nationwide gross sales tax regime launched in July, the GST on gold jumped to three p.c from 1.2 p.c beforehand.
Indian authorities in September tightened anti-money laundering guidelines for jewellers, though the brand new rules have since been briefly shelved.
The nation`s gold demand within the July-September quarter dropped 24 p.c from a yr in the past to 145.9 tonnes, the WGC mentioned in a report printed on Thursday.
Within the October-December quarter, demand will probably be extra “sturdy than the September quarter” as Indians brace for the marriage season and festivals similar to Diwali, when shopping for bullion is taken into account auspicious, Somasundaram mentioned.
Two-thirds of India`s gold demand comes from rural areas, the place jewelry is a standard retailer of wealth.
However monsoon rains didn’t fall evenly across the nation this yr, hitting incomes in some farming areas, mentioned the WGC, including that “this might have a knock-on impact on jewelry demand in these areas over coming quarters”.
Business officers beforehand mentioned India’s gold imports within the final quarter of 2017 may drop by a fourth from a yr in the past as traders search higher returns from riskier property like equities.