Indian Gold Demands Increased Between 800-850t, Amid inflation In 2022: WGC

India's inflation rate has climbed sharply in 2022, however, this could not impact gold demands in the country. According to Somasundaram P.R., Regional CEO India, World Gold Council (WGC), India's gold demands will be between 800-850 tonnes in 2022, Reuters reported. Among the total demands, 80% will be for gold jewellery and the balance in gold coins. WGC added that the 5% duty hike on gold by the union government is not going to leave any major impact on gold demands.

WGC mentioned today that India's gold demand in H1 of 2022 increased 42% YoY, but consumption in H2 could be lower than the previous year, as 'higher inflation erodes disposable income'. Additionally, he said, "Inflation is making it difficult for people, especially in rural areas, to save more and allocate to gold."

Earlier in 2021, gold demands have been reported at around 797 tonnes in the country. Somasundaram added that the union government is watching the INR: dollar exchange and the union government might act against imports in case the INR falls further against the dollar.

Commenting on the importance of the India International Bullion Exchange (IIBE) Somasundaram said that, with a robust regulatory framework, the exchange is an important component. It will help India to take a position India in the global market. He said, "If the Indian gold refiners can align with the global standards then Indian gold bars can also be traded on the exchange."