According to the World Gold Council (WGC), gold consumption in India in 2022 will decline by 3% year-on-year.
Gold has a deep meaning in Indian history and attracts people from all over the world with its beauty and charm. Its golden brilliance has awakened the hearts of millions across seas and borders.
Over the years, India’s fascination with gold has grown stronger and Indians account for most of the gold consumed in the world. In Indian history, gold is more than an investment; it is a culturally important metal that has a place in both the hearts and homes of Indians
The majority of India’s population subsists on scarce resources, but they find a way to buy gold and make it an integral part of their lives regardless of the city’s gold price. Gold has buyers across the country, from Delhi to Chennai and from Ahmedabad to Calcutta.
There are several reasons to put gold on a pedestal in India where gold is likely to stay for a long time to come. Lower consumption in the world’s second-biggest gold buyer could weigh on global gold prices, but help reduces India’s trade deficit and support the struggling rupee.
India’s gold consumption fell to 774 tonnes in the December quarter of last year, down 20 percent to 276.1 tonnes, the WGC said in its report.
In the March quarter of 2023, higher spring crop prices and more favorable days for weddings could increase gold consumption in rural areas, which could boost gold consumption, the commission said. Two-thirds of India’s gold demand typically come from rural areas where gemstones are a traditional store of value.
Gold is an integral part of the bride’s dowry in India and is a popular gift for family and guests at weddings.
“Demand will, however, continue to face headwinds from the higher domestic gold price and persistently high rural inflation,” the WGC said.
Domestic gold prices hit a record high of 57,149 rupees ($699.63) per 10 grams in January. The WGC said rising gold prices have prompted some investors to sell their gold, while some consumers trade their old gold jewelry for new ones, increasing gold recycling in India by 30% to 97, 6 tonnes by 2022, the WGC said.