India\'s gold demand could fall to three-year low as prices hit record high

Mumbai: India’s gold demand could fall 10 per cent in 2019 from a year ago to the lowest level in three years as a rally in local prices to a record high dents retail purchases during a key festive season, the head of an industry body told Reuters.

Lower purchases by India, the world’s second biggest consumer after China, could limit a rally in global prices that hit a 6-year high earlier this week.

“Of late, customers are not used to such a jump in prices,” Anantha Padmanabhan, chairman of the All India Gem and Jewellery Domestic Council (GJC) told Reuters by telephone.

“They will not raise allocations to buy gold just because prices have risen. Volume-wise demand will drop 10 per cent from last year.”

India’s gold consumption eased 1.5 per cent in 2018 to 760.4 tonnes, below a 10-year average of 838 tonnes, according to data compiled by the World Gold Council.

Local gold prices hit a record 35,960 rupees per 10 grams on Tuesday, having jumped more than 10 per cent over the past month.