On Thursday World Gold Council (WGC) said that demand of the precious yellow metal gold in India could lift higher in the June quarter compared to the same period a year ago as local prices are on the decline ahead of the auspicious Akshaya Tritiya festival and also as there are number of auspicious days for weddings during the period.
Currently, global gold prices are hovering near a 4-month low and any surge in demand from the world's second-biggest consumer of gold is likely to provide some support to its pricing. Nonetheless, the move will be a deterrent for India's trade deficit and will weigh on the rupee's trajectory, which is already nearing the 70 mark.
"Prices are attractive. In the second quarter we might see a surge in demand due to Akshaya Tritiya and higher auspicious days for weddings," Somasundaram PR, the managing director of WGCs Indian operations said.
Further, the MD added that a number of auspicious days for weddings as per the Hindu calendar in the June quarter of 37 as against just 21 in the same period last year is expected to drive significantly gold sales due to wedding season demand.
Also, the Hindu festival Akshaya Tritiya is falling on May 7 when buying gold is considered as auspicious.
During the first quarter of the calendar year 2019, the demand for gold surged by 5% to 159 tonnes in comparison to the year-ago period due to lower prices as well as more number of auspicious days for a wedding.
For 2019, the report forecasts gold consumption in the range of 750 to 850 tonnes as against 760.4 tonnes registered in 2018 and a 10-year average of 838 tonnes. In the previous year, gold consumption in India took a hit due to the increase in local prices on the back of depreciating rupee and also as drought affected the demand from the rural population.