MUMBAI, AUG 16: Gold demand in India could drop by around 33 percent at about 700 tonnes this year due to weak consumer sentiments following record high local prices and rising inflation following concerns over weak monsoon, the World Gold Council said on Thursday. “The overall demand in the country for this year is likely to be in the range of 688—700 tonnes, which will be around 28—33 percent lower than last year,� WGC Managing Director, India and Middle East, Ajay Mitra, told reporters here. However, the demand is likely to recover in the second half of this year following the upcoming festival and marriage seasons in the last two quarters and confidence building measures expected to be taken by the Finance Minister, he said. “In our view the worst is over. There is going to be a recovery due to the festivals. We expect the rate of decline to shrink. We also think the host of measures expected to be taken by the finance minister will help in strengthening consumer confidence,� he said. During the first half, gold demand declined by 15 percent in value terms at Rs 1,05,867 crore compared to Rs 1,24,649 crore in the corresponding period in 2011. In terms of tonnage also the demand went down by 36 percent at 383.2 tonnes from 596 tonnes in the first half of 2011. “Gold demand in the first half of 2012 has been subdued, primarily due to the poor macro economic conditions. India’s economy has expanded at the slowest pace in nine years during this period. General sentiment is low with India staring at below 6 percent GDP growth in fiscal year 2012—13 due to the deficit in monsoon rains and the gloomy global economic outlook,� Mitra said. Keywords: Gold, demand, World Gold Council, festival season, consumer sentiments, high price, weak monsoon

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