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India to see a significant rebound in gold jewelry demand: BMO Capital Markets

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(Kitco News) India is likely to see a strong recovery in gold jewelry demand in the next six months, says BMO Capital Markets citing Metals Focus. “India will embark on a 6-month long festive season from October onwards that should see a significant rebound in gold jewellery consumption and narrowing Indian gold discounts,” writes BMO’s commodities analyst Colin Hamilton. India’s jewelry demand plunged 60% year-over-year in the first half of 2020 due to the effects of the COVID-19 lockdowns, which pushed local gold prices into a sharp discount. With the festival season just around the corner, “Metals Focus reports that rising enquiries from retailers and manufacturers means they now model the discount to be in the region of $17/oz (from $60/oz in early September). While they see this narrowing further in the coming months as consumption rises, discounts are likely to persist until year-end, with COVID-19 disruptions still ongoing and consumer sentiment remaining weak,” adds Hamilton.

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