India buys more jewellery, but global gold demand falls
New Delhi-India (Nov 13) Demand for gold, especially jewellery, soared in India in the third quarter, whilst total global demand fell to its lowest level for five years.
China, which last year was the world's biggest buyer of gold, has pulled back from the market in 2014.
But in India, demand for gold jewellery surged 60% in the July-to-September period, the World Gold Council said.
Overall, Indians bought 39% more gold in the run-up to Diwali and the start of the traditional wedding season.
The World Gold Council (WGC) said that a weakening of gold prices in rupee terms had boosted demand in India, and that confidence in the new government led by Narendra Modi had also contributed to the rise.
The increase in Indian purchases is more marked because demand for gold in the same period in 2013 was particularly weak, because of government restrictions on gold imports that were designed to limit the country's current account deficit.
"While the increase is partly reflective of the weakness in Q3 in India last year when the government introduced import curbs and raised import duties, it also demonstrates the resilience of the country's appetite for gold jewellery," the WGC said.
In China, jewellery demand fell 39% compared with the same period a year earlier.
But Alistair Hewitt, the WGC's head of market intelligence, said that China remained "a very key pillar of global gold demand".