Mumbai: Higher gold prices, increased
uncertainty due to the global recession coupled with lower
purchasing power because of drought are expected to hit
domestic demand for the precious metal, Citi India's Economist
Rohini Malkani said in a report here.
Reduced domestic demand saw India's imports dip 51.5 per
cent year on year to just 16.5 tonnes in November.
India is the world's largest importer of gold.
Historically, Indian gold demand has been price
inelastic, with the bulk of the demand coming for jewelleries.
However, record-high prices and the global recession, coupled
with the drought, have kept away consumers this year, the
report said.
The lower offtake could
also be due to consumers meeting
demand by exchanging old items, the report added.
According to the latest data by the World Gold Council
(WGC), India's gold demand stood at 137.6 tonnes in the third
quarter of 2009, down 49 per cent YoY. Cumulatively, demand in
9M 09 was 264-tonnes, versus 553-tonnes in the same period
last year.
PTI
First Published: Monday, December 07, 2009, 20:56