NEW DELHI: Fuelled by lower prices and a good monsoon shower in major parts of the country, the demand for gold surged as much as 30 per cent in the third quarter of this year.
“At 249.5 tonnes, total consumer demand was 31 per cent higher than Q3, 2007 levels. In value terms, demand hit the record quarterly sum of seven billion dollars,” World Gold Council said in a report.
The report, Gold Demand Trend - Third Quarter 2008, pointed out that after a sluggish start to the quarter, gold jewellery demand surged as a sharp drop in the gold price prompted consumers into frenzied buying.
Between 15 July and 15 August, the gold price fell by 21 per cent in both terms of Rupees as well as US dollars and consumers rushed to take advantage of the lower prices, particularly ahead of Diwali, it added.
Moreover, it said, most of the country experienced a good monsoon giving a boost to the rural spending just at the beginning of the festival season. “After the winter harvest (March-April), farmers usually hold back a portion of their earnings as cash sa vings for the year in case the monsoons fail. As the monsoons were good, it is likely that such savings were released for consumption during the festive season, with a portion of them directed towards increased purchases of gold jewellery,” it said.
Investment demand for gold was also boosted by the pullback in the gold price during the third quarter. “Purchases of gold bars and coins by retail investors amounted to 71.0 tonnes, the second highest quarter on record and equivalent to a rise of 36 per cent over the 52.3 tonnes consumed in the third quarter of 2007 and equivalent to spending of Rs 8,700 crore,” it said. - PTI
