Gold Demand in India Rises 5% in 2024, 2025 Forecast at 700-800 Tonnes

Mumbai, Feb 5 (PTI) Gold demand in India witnessed a 5 per cent on-year rise at 802.8 tonnes in 2024 supported by reduction in import duty, and purchases related to weddings and festivals, and going ahead consumption of the yellow metal in 2025 is likely to be between 700-800 tonnes, according to the the World Gold Council.

The World Gold Council (WGC) in a report on Wednesday said gold demand in the country in 2024 stood at 802.8 tonnes, as against 761 tonnes in 2023.

The total gold demand value went up by 31 per cent at Rs 5,15,390 crore in 2024, compared to Rs 3,92,000 crores in 2023.

"Our outlook for 2025, gold demand is between 700-800 tonnes. It is expected that gold jewellery demand will recover due to wedding-related purchases, provided there is some level of price stability," WGC Regional CEO, India, Sachin Jain told PTI.

It is pertinent to mention here that the gold price touched multiple record highs over the past year.

According to the All India Sarafa Association, gold prices extended the rally for the fifth straight session and rose Rs 500 to hit a fresh peak of Rs 85,800 per 10 grams in the national capital on Tuesday amid robust demand from jewellers and retailers.

In this year, gold has surged Rs 6,410 or 8.07 per cent to Rs 85,800 per 10 grams from Rs 79,390 per 10 grams on January 1.

The WGC's 2024 Gold Demand Trends report stated that during the fourth quarter (October-December) demand was flat at 265.8 tonnes, which is similar to 266.2 tonnes in the same period of 2023.

Meanwhile, in 2024, the jewellery demand declined by 2 per cent to 563.4 tonnes in 2024, compared to 575.8 tonnes in 2023, said.

"The total jewellery demand, in terms of volume, decreased by 2 per cent to 563.4 tonnes in 2024, despite the gold price reaching multiple record highs.

"This indicates the resilience of gold jewellery demand in India and highlights the effect of the duty cut in July as well as India's stronger economic growth compared to many other markets," Jain said.

He said that many consumers purchased gold jewellery in the late third quarter when the duty cut mitigated much of the recent price increase.

Gold prices resumed their upward trend after the July duty cut, and a subsequent correction in November attracted investors seeking lower-priced purchases, he added.

Nonetheless, Jain said, the value of gold demand during 2024 increased by 22 per cent, illustrating the ongoing demand for gold and supported by the rise in gold prices throughout the year.

"Total gold investment went up by 29 per cent in 2024, at 239.4 tonnes - the highest since 2013, compared to 185.2 tonnes in 2023, reinforcing gold's status as a safe-haven asset," Jain stated.

Gold recycling last year saw a decline of 2 per cent at 114.3 tonnes from 117.1 tonnes in 2023.

Further, gold imports in India in 2024, decreased by 4 per cent to 712.1 tonnes as compared to 744 tonnes in 2023.

"There was consistent ETF demand throughout the year, and the festival period of Dhanteras and Diwali in October/November stimulated buying in the final quarter. This was further enhanced in major metropolitan cities by e-commerce platforms offering rapid delivery of small gold investment bars and coins," he noted.

Further, he said, the Reserve Bank of India was a significant purchaser in 2024, acquiring 73 tonnes, more than four times its gold purchases of 16 tonnes in 2023.

Additionally, it is anticipated that the trend of robust gold investment demand will continue, with retail investors showing growing interest in gold ETFs, digital gold, and coins and bars, he added.