Mumbai: The country's gold demand dipped by 12 percent in 2012 to 864.2 tonnes, mainly on account of higher import duties, jewellers strike over proposed measures to curb imports and a sharp rise in the domestic price, World Gold Council said in its recent report.
The overall demand of gold in the country had stood at 986.3 tonnes in 2011, according to the WGC Gold Demand Trend 2012 report released on Thursday.
"China and India remain the world's gold power houses. In India, consumer sentiment towards gold remained strong despite measures aimed at curbing demand, reaffirming gold's role in Indian society.
In an underdeveloped financial system like India, gold has an important role to play," WGC Managing Director, Investment, Marcus Grubb said.
In 2013, WGC expects the demand to be in the 865-965 tonnes range, an 11 percent increase at the upper end, depending on any further government measures, he said.
India is likely to remain the biggest market for gold this year followed by China, he said.
In the first half of 2012, consumers faced headwinds in the form of higher import duties, market turmoil over proposed measures to curb imports and a sharp rise in the local price.
However, the demand staged a strong revival in the second half of the year as the market thrived during the fourth quarter wedding season and festive period.
Total jewellery demand in the country in 2012 was down by 11 percent to 552 tonnes, compared to 618.3 tonnes in 2011.
However, the demand in terms of jewellery value rose by 8 percent to Rs 1,l58,090 crore, compared to Rs 1,46,067.8 crore in 2011.
Total investment demand was down by 15 percent to 312.2 tonnes, against 368 tonnes in 2011.
In value terms, gold investment demand went up by a marginal 3 percent to Rs 89,412 crore compared to Rs 86,936.7 crore in 2011.
"Despite the turbulent macroeconomic climate throughout the year, as well as the regional uncertainties affecting India and China, the two largest gold markets, annual demand was 30 percent higher than the average for the past decade," Grubb added.