Gold Demand Down by 15% Due to Poor Rain

Kolkata: The demand for gold will be less this wedding season – by 10 per cent-15 per cent – beginning January 15 in rural India as farmers have been affected by a poor kharif crop due to inadequate rains, reports The Economic Times. Lower commodity prices have made matters worse for them, and now they are keeping their fingers crossed on the rabi crop, which doesn’t look promising due to a surprising lack of winter chill so far.

Talking to ET, Ketan Shroff, spokesperson for Indian Bullion & Jewellers Association (IBJA) said, “Rural demand is going to take a beating as farmers have saved less this year. The outlook for the rabi crop is not very bright as of now, which will force farmers to hold back decision to buy gold.”

Incidentally, rural India contributes 60 per cent to the country’s gold consumption of 950-1,000 tonne annually. “Rural India may not buy gold as an investment product this wedding season as the cash in hand is less this year. Overall, demand in rural India is expected to be muted this fiscal. Unless commodity prices revive, which doesn’t look like it will happen immediately, rural India may not buy gold,” said Saurabh Gadgil, managing director, PN Gadgil Jewellers.