Commitee has GoldGold consumption may cross 1,000tn this year
BS Reporter / Bangalore September 05, 2007
Gold consumption in India is likely to cross the 1,000-tonne mark for the first time if prices remain stable or grow steadily, according to World Gold Council (WGC).
Consumption rose over 70% to 528 tonne in the first half of the current year from 307 tonne in the corresponding period last year. The consumption was a little over 700 tonne in 2006.
Philip Olden, managing mirector and chief marketing officer, WGC says he is "cautiously optimistic" that the growth rate will not dip. "If there isn’t too much volatility in prices, the second half should also see this high rate of growth in consumption. Also, the festival and wedding season, which create a strong demand, is just starting," Olden added.
Of the 528 tonne consumed this year, it is jewellery rather than investment that has driven sales. While 387 tonne have been bought as jewellery, the balance has been bought for investment in the form of coins and bars.
According to Olden, several factors are driving the demand for gold in the country like retail networks expanding rapidly and broadening of demand outside the wedding category.
Rural households are large consumers of gold in India. Last year, 60% of the demand for gold came from rural India, and WGC says the trend is likely to continue.
"The reason behind this is the growing affluence of rural India. Besides, they have fewer investment options than people in towns and cities," K Shivram, vice president, World Gold Council said. This trend is likely to continue as more and more retailers expand their networks to small towns and rural areas.
Globally, the consumption in the first half of the year was 1,480 tonne - an increase of 25% over the same period last year.