Gold price has recently touched a record high and for a long time the prices in the Indian market have remained around Rs 60,000 per 10 gm and due to these increased prices, there has been a huge decline in the consumption of gold in the country. Not only jewellery, there has been a drop in the demand for investment as well.
Look at the figures of gold consumption during the March quarter. Consumption has been the lowest in 10 quarters and has decreased by 17% compared to the March quarter of last year. During the March quarter this year, only 112.5 tonne of gold has been consumed. Last year this figure was 135.5 tonne. And in the December quarter of last year, more than 276 tonne of gold was consumed. Since 2016, there has never been such a low consumption of gold in any quarter, except in 2020 during the covid period. Almost 6-70% of the gold is used for jewellery and the higher prices have the hit the demand hard.
During the March quarter, only 78 tonne of gold demand for jewellery has been recorded. This figure was 94 tonnes in January to March last year. Similar is the case with the demand for gold bars and coins. Their demand has also decreased by 17% in the March quarter. During January to March this year, the demand for gold bars and coins was only 34 tonne, whereas in the March quarter last year, it was 41 tonne.
With this unprecedented price rise, jewellers are buying gold only when there is demand from customers and that is the reason there has been a huge drop in the demand for gold.
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