(Kitco News) – India's gold demand will top out above 750 tonnes in 2024, not far behind 2023’s 761 tonnes, according to Sachin Jain, regional CEO for India at the World Gold Council (WGC).
“Gold is already selling at a premium and it is a clear reflection of the increase in demand for gold,” Jain told Times of India on Tuesday. “We think Q4, which is the festive season, will be one of strongest quarters for gold demand in the country ever.”
“We think it will be close to about the upwards side of 750 tonnes,” he added.
Gold demand in Q2 2024 fell 5% over the same period in 2023, declining from 158.1 tonnes to 149.7 tonnes this year, according to the WGC. However, demand during the first half of 2024 increased by 1.5% to 288.7 tonnes compared to the 284.4 tonnes is H1 2023.
Jain also pointed out that the consumption value of gold sold in Q2 of 2024 was 14% higher than in the second quarter of 2023.
“This was due to the average quarterly price of 24K gold without customs duty and GST jumped from Rs 52,191 in Q2 CY2023 to Rs 62,700 during Q2 CY2024,” he said. “We also saw the investment segment comprising bars and coins boomed in this year's second quarter, which rose by 46% year-over-year.”
New gold association unites India’s major players
Tuesday also saw the announcement of the formation of the Indian Association for Gold Excellence and Standards (IAGES), a self-regulatory organization (SRO) for the country’s gold industry. IAGES includes the Indian Bullion and Jewellers Association (IBJA), All India Gem And Jewellery Domestic Council (GJC), and the Gem and Jewellery Export Promotion Council (GJEPC), and it is supported by the World Gold Council.
“This is the first SRO in the gold business in the world,” Jain said. “We are making an attempt to bring the entire value chain of gold, including the manufacturers, retailers, gold refiners and dealers together.”
India is the world’s second-biggest gold consumer after China, but Jain said the industry has suffered from a trust deficit with consumers and even the government due to poor practices by a small section of the business.
“The purpose of this association is to provide accreditation based on a very strict audit,” Jain told Reuters. “After the audit, the member will earn the IAGES logo, which they can display.”
The WGC would take the initiative to popularize IAGES among retail consumers and would also finance the campaign, he added.
“IAGES will aim at increasing consumer confidence and enhancing trust in the Indian gold industry through encouraging adoption of fair, transparent and sustainable practices, regulatory compliance, establishing code of conduct and introducing an audit framework – created by the Indian gold industry, for the Indian gold industry across the entire industry value chain,” the new SRO said in a statement.
IAGES will be independently governed and professionally managed, they said, but the adoption of the Code of Conduct will be entirely voluntary. The SRO is expected to be operational in early 2025.
