India’s gold demand saw a year-on-year decline of 3 per cent at 747.5 tonnes in 2023 over 774.1 tonnes in 2022 amid high gold prices, according to the World Gold Council. The council, however, expects a spurt in future demand to 800-900 tonnes if prices do not see significant volatility.

Gold demand during the fourth quarter of 2023 was 266.2 tonnes, down 4 per cent from 276.3 tonnes in the corresponding period of 2022.

Although consumer interest remained high during the year, it lagged trade sentiment.

“October’s price correction during Navratri stimulated a robust consumer response, boosting Diwali sales in November. However, demand declined in December as gold prices resumed an upward trend, resulting in a 9 per cent drop in Q4 jewellery demand compared with Q4 2022,” said Somasundaram PR, regional CEO, India, World Gold Council.

“Bar and coin investment in India rebounded, growing 7 per cent to 185 tonnes year-on-year. Fourth quarter demand touched 67 tonnes, 64 per cent above the five-year quarterly average. The correction in gold prices led to some robust investment responses in Q3 and Q4, supported by increased interest from physically backed gold ETF investors, setting total holdings in Indian-listed products to a record 42 tonnes by year-end,” he said.

According to WGC data, the average gold price during the fourth quarter was $1971.5 per ounce during Q4 2023, up from $1889.9 per ounce during Q1 2023. Gold prices in India breached the Rs 61,000-mark during April 2023.

“India’s gold demand should benefit from positive economic conditions in 2024. The subdued demand range of 700-800 tonnes since 2019 suggest the potential for a spurt in the near future. However, any short-term impediments to higher demand could arise from another round of sharp price hikes and volatility triggered by global factors,” he said.