After demonetisation, demand jumped as many people with unaccounted money bought the yellow metal.
Gold demand seems to be returning after several months of lull in the past year. In the first two months of this year, January and February, the average monthly import has been around 50 tonnes.
Except January, October and November of last year, the monthly average during 2016 was 30 tonnes.
After nearly 48 tonnes of import in January, the February import is estimated at 50 tonnes.
At the beginning of the month, the demand was seen in a jewellery show and later small-ticket jewellery demand around Valentine’s Day. In February last year, the import was only 27 tonnes, of which a large part was for re-export; domestic demand was much lower.
The trend of low import continued till September, with demand picking up only before Diwali.
After demonetisation, the demand jumped sharply as many people holding unaccounted money rushed to buy the yellow metal but that lasted for only a few days.
The demand dried up in December. Now, since the beginning of the year, the price of gold has started rising. In 2016 so far, global prices have gone up by 8.8 per cent to $1,254 an ounce, and of silver by 14.9 per cent to $18.3 an oz.
In Mumbai, spot standard gold prices are up six per cent to Rs 29,575 per 10g; silver is up 9.5 per cent to Rs 43,740 a kg. This has revived consumer interest.
Shekher Bhandari, senior executive vice-president at Kotak Bank, said: “The outlook for gold prices has improved and hence those waiting to buy at lower levels have returned. The marriage season demand, impacted after demonetisation, has also resumed.”
Consumers and jewellers seem to have reconciled themselves to the new norm of buying jewellery on record. Most of them have money in banks and buying gold on record is not a big hurdle, explained a jeweller.
Many big stores are now also accepting cheques and jewellers in general are not charging extra for card payment.
An importer and another analyst say, “We see some slowdown in March as demand might be slack due to a lower number of days considered good for buying gold and the March-end priorities for tax saving (with the ending of the financial year).
However, in April, demand and hence import will revive, with Akshaya Tritiya at month-end.”
