Gold demand in India for the third quarter of 2016 calender year declined by 28% weighed by high prices.
Global gold demand reached 993 tonnes (t) in the third quarter of 2016, a fall of 10% compared to the same period last year, according to the World Gold Council's latest Gold Demand Trends report.
Total investment demand rose 44% to 336 tonnes as investors continued to build up their strategic allocations to gold, it said. Total mine supply dropped by 4 per cent to 832 tonnes in Q3 from 866 tonnes in the same quarter last year.
"In India, more stringent government policies, high gold prices and a squeeze on disposable rural incomes combined to dampen consumer sentiment. These were key factors in total jewellery demand falling 21% year-on-year to 493t", WGC said.
Global jewellery demand was down 21% at 493t, compared with 622t in the same period last year. Total investment demand grew 44% to 336t this quarter compared to 232t last year.
Alistair Hewitt added, "The core physical markets of India and China continued to suffer under high prices and squeezed incomes in Q3, but it looks like Q4 may be better. Price expectations have always been a key trigger for gold purchases and consumers responded quickly to the price drop in early October. And in the case of India, the first healthy monsoon in three years will boost rural incomes, supporting demand during the festive and wedding season."