India's gold demand in the June quarter fell 5% from a year ago, but consumption in the second half of 2024 is set to improve due to a correction in local price following a steep reduction in import taxes, the World Gold Council (WGC) said on Tuesday.

Higher purchases in the world's second-biggest gold consumer could support global benchmark prices, which are trading near record highs.

The recent 9 percentage point reduction in import duty on gold, implemented before the main festival season beginning in September, is expected to revive gold demand, further supported by good monsoon rains, said Sachin Jain, CEO of WGC's Indian operations.

India last week slashed import duties on gold to 6% from 15%, a move industry officials said could lift retail demand and help cut smuggling.

The duty cut brought down domestic prices of gold last week to 67,500 rupees ($806.20) per 10 grams, their lowest in four months, from a record high of 74,777 rupees earlier this month.

Good monsoon showers boost food grain production and improve farmers' income. Two-thirds of India's gold demand usually comes from rural areas, where jewellery is a traditional store of wealth.

"Strong gross domestic product forecasts and rural sector recovery are all likely to support demand in the second half of the year," WGC's Jain said.

India's gold consumption in the April-June quarter fell 5% to 149.7 metric tons, as a 17% fall in jewellery demand offset a 46% rise in the investment demand during the quarter, the WGC said.

Demand for gold from India could stand between 700 metric tons and 750 metric tons in 2024, the lowest in four years, it said.

The Reserve Bank of India continued its gold buying spree in the June quarter, adding 19 tons, which brought its total purchases for the first half of the year to 37 tons, more than double the total purchased in all of 2023, the WGC said. ($1 = 83.7260 Indian rupees)