Demand for gold in India may increase this year. According to data from the World Gold Council (WGC), gold consumption in India is expected to increase further in 2022. Gold consumption in India rose to 797.3 tonnes in 2021 on the back of improved consumer confidence and demand pick up following the disruptions related to COVID-19 and the upward trend is expected to continue this year. The World Gold Council (WGC) said in its Gold Demand Trend 2021 report that gold demand grew 78.6 percent to 797.3 tons in 2021, from 446.4 tons in 2020.
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Demand exceeds estimates in third quarter
Somasundaram PR, Regional Chief Executive Officer at WGC, said the year 2021 has once again tested the strength of traditional thinking about gold and taught many lessons in the revival that will shape policy thinking for years to come. India’s demand for gold grew 79 percent to 797.3 tons, mainly due to exceptional demand in the fourth quarter of 343 tons. This demand even exceeded our estimates in the third quarter and turned out to be the best quarter ever.
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Demand for gold is expected to be around 800-850 tons by 2022
For the year 2022, Somasundaram said gold demand is expected to be around 800-850 tons if the current scenario continues and there are no significant disruptions. He said gold jewelry demand doubled in 2021 from the previous year, reaching a six-year high, surpassing pre-pandemic levels. In the fourth quarter there was a record demand of 265 tons. In terms of value, the demand for jewelry rose 96 percent to Rs 2,61,140 crore. In 2020 it was Rs 1,33260 crore.
Total investment demand grew 43 percent to 186.5 tons in 2021. In terms of value, demand grew 45 percent to Rs 79,720 crore. However, total gold recycling in the country fell 21 percent to 75.2 tons. India’s total gold imports rose 165 percent to 924.6 tons.