Mumbai: Demand for gold in India during the April-June period increased 19.2 per cent to 76.1 tonne, compared to the same quarter of 2021, according to a report by the World Gold Council (WGC). In April-June 2021, demand stood at 63.8 tonne.

“Demand for gold in India for Q2 2021 was at 76.1 tonne, increase by 19.2 per cent as compared to overall Q2 demand for 2020 (63.8 tonne),” it said.

Further, total jewellery demand in India for Q2 2021 was up by 25 per cent at 55.1 tonne as compared to Q2 2020 (44 tonne).

The value of jewellery demand was Rs 23,750 crore, a rise of 29 per cent from Q2 2020, it said.

Total investment demand in Q2 2021 increased by 6 per cent to 21 tonne in comparison to that in Q2 2020. In value terms, gold Investment demand was Rs. 9,060 crore, up by 10 per cent from Q2 2020 (Rs. 8,250 crore).

Mr. Somasundaram PR, Regional CEO, India, WGC said, “Q2 2021 was marked by widespread regional lockdowns following rise in covid infections. Unlike the previous year when a national lock down took businesses by surprise, this quarter was relatively better as businesses were more prepared.”

Demand in Q2 2021 showed a 19.2 per cent Y-o-Y increase on a very low base of Q2 2020, the impact was, however severe as it muted demand during Akshaya Tritiya and wedding season in Q2.

Outlook for second half of year:

Looking forwards, the World Gold Council estimates jewellery demand could be in the range of 1,600 to 1,800t for the year, well above 2020 levels but below its five-year average. Investment demand should be in the region of 1,250 to 1,400t – slightly less than last year but in line with the ten-year average. Central banks are likely to continue buying gold on a net basis in 2021 at the same rate or above that of 2020, and the supply of gold in 2021 is expected to increase modestly, when compared to the previous year.

Louise Street, Senior Markets Analyst at the World Gold Council, commented: “As the global economic recovery continues, we have been encouraged to see consumer demand returning, with strong year-on-year growth in jewellery.

“But investment is a more complex picture. Despite evidence of strategic buying from both individuals and institutions, tactical investors had a more mixed impact in the first half of the year. This was partly seen through gold ETFs where inflows in the second quarter only slightly dampened the effects of the preceding quarter’s sell-off.

Looking ahead, we expect continued improvement in the consumer elements of demand for the rest of the year. And while ETFs will most likely not repeat the record performance of 2020, the need for effective risk hedges and the continued low-rate environment supports our view that investors will add to their strategic allocations throughout the rest of the year.”

Key findings included in the latest Gold Demand Trends report for Q2 2021 are as follows:

• Overall demand (excluding OTC) declined in Q2 by 1% year-on-year to 955.1t
• ETFs saw inflows totalling 40.7t (US$2.4bn)
• Bar and coin demand was at 243.8t, an increase of 56% y-o-y; achieving its best quarter since 2013
• US dollar gold price averaged US$1,817.4/oz, 6% higher than in Q2 2020
• Global jewellery demand improved to 390.7t, a year-on-year increase of 60^%.
• Central banks were net buyers of 199.9t with the largest purchases by Thailand, Hungary and Brazil
• Demand in the technology sector 18% higher y-o-y at 80t
• Total supply was 13% higher y-o-y, rising to 1,172t as the industry experienced far less Covid-related disruptions.

Key findings included in the latest Gold Demand Trends report for H1 2021 are as follows:

• Overall demand (excluding OTC) declined in H1 by 11% from 2020 at 1,833.1t
• ETFs saw H1 net outflows of 129.3t for the first time since 2014
• Bar and coin demand had a H1 total of 594.5t, the strongest since 2013
• Global jewellery demand for H1 was 873.7t, 17% below the 2015-2019 average
• Central banks were net buyers of 333.2t, 39% above the 5-year H1 average
• Demand in the technology sector totalled 161t, fractionally above that of H1 2019 (160.6t)
• Total supply 4% higher y-o-y at 2,308t