Gold is a precious metal which most of the Indians love to own undoubtedly. India also happens to be the second largest consumer of the yellow metal across the globe. The age-old belief of possession of the total weight-age of gold in a family is considered as a status symbol which makes the countrymen to go for it.
Let's understand the likely demand for the yellow metal during fiscal 2019.
The demand for gold in India is likely to pick up during 2019 and is likely to rise above 10-year average states the World Gold Council (WGC). It predicts that the current annual consumption of gold for 2019, is likely to be in the range between 750 - 850 tonnes as against the previous year's record of 760.4 tonnes.
The Managing Director of WGC's India operations, Somasundaram PR states that the demand for the yellow metal in India has averaged up to 838 tonnes over the last 10 years. The rise in demand will support its prices to rally up further which are currently flat in the global markets owing to mighty dollar amidst strong U.S. economy.
A strong dollar will make gold costlier for holders of other currencies. India imports most of the gold from foreign countries and pays for the same in terms of U.S. dollar. The rise in its consumption in the domestic market will enlarge India's trade deficit and pressurize domestic rupee against the U.S. currency.
Owing to high prices most of the local consumers are postponing the purchase of jewellery metal as they are waiting to witness a further downfall in the prices of gold to head for purchases. WGC states that the country has witnessed fall in the consumption of gold to the tune of 1.4 per cent last year and there is also a considerable fall in the demand for gold coins and bars by 4 per cent, which otherwise acts as an investment tool.
Today the gold prices in India was seen trading at Rs 30,800 for 10 grams of 22 karats and at Rs 31,800 for 10 grams of 24 karats.
The upcoming auspicious day of Akshaya Tritiya which falls in the month of May is likely to help the gold rates to rally up in India making it even more expensive. The penchant for gold in India is such that people will remain unaffected by its prices and the yellow metal continues to be a dominant purchase driver on the occasion of Akshaya Tritiya.