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Jewellery demand shrinks 48% in Q3 even as net imports rise 8%

Thu Oct 29 2020


Indian demand for gold jewellery shrank 48% year-on-year (YoY) to 52.8 tonnes in the September quarter (Q3) even as net bullion imports were 8% higher at 90.5 tonnes, data released by miner's lobby World Gold Council showed.


The small increase in import indicates cautious expectations of a revival in demand for jewellery in the October-December period, said Amit Modak, CEO, PN Gadgil & Sons.


Gadgil added that organised jewellers would be gainers in the current scenario of high prices and falling volumes.


Indeed, jewellery major Titan reported an 89% recovery in sales in Q2 of FY2020-21 led by a sharp recovery in the jewellery division post the significant disruption caused by the Covid-19 pandemic in India in the first quarter of the fiscal.


One of the reasons for the fall in volumes across the board was the high price, which in India was up 37% YoY.


"Weakness caused by COVID-19 was compounded by record gold prices: Q3 demand fell 29% YoY to 333t. While China and India accounted for the largest volume declines, weakness was global," said WGC.


Q3 also marked the first quarter in almost a decade of net sales by central banks.


"Central banks generated modest net sales of 12t of gold in Q3," said WGC. "This was the first quarter of net sales since Q4 2010, primarily due to concentrated sales by two banks. Buying continues at a moderate pace, driven by the need for diversification and protection amid the negative rate environment."