India's gold demand experienced a 3% decline in 2023, totaling 747.5 tonnes, marking the lowest level since 2020. The World Gold Council's report released on Wednesday highlighted that the surge in gold prices significantly impacted the demand for jewelry in the country.
In the October-December quarter, Indian gold consumption further dropped by 4% to 266.2 tonnes. Despite increased sales of coins and bars for investment purposes, this rise was overshadowed by a notable decline in jewelry demand, according to the World Gold Council (WGC).
The WGC anticipates that gold demand in the January-March quarter will continue to remain low due to a reduced number of auspicious wedding days. The Indian government has also implemented high customs duties on gold to restrict imports, aiming to prevent the outflow of precious foreign exchange needed for essential imports like crude oil.
Switzerland and the United Arab Emirates stand out as the primary gold suppliers to India, according to the report.
On a global scale, the jewelry market demonstrated resilience despite record-high gold prices, with a slight 3-tonne year-on-year increase in demand. China played a significant role in this scenario, recording a 17% surge in gold demand, which helped offset a 9% decrease observed in India.
In terms of gold production, mine output remained relatively flat in 2023, registering a modest 1% increase. Recycling, although rising by 9%, fell short of expectations given the elevated gold prices, contributing to a 3% overall increase in total supply, as outlined in the report.
(With Agency Inputs)
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