Photo: Mamta Badkar
jewellery demand fell 19 per cent and investment demand fell 46 per cent, as gold demand in India dropped a total of 29 per cent, or 207.6 tonnes (t), according to the World Gold Council.The drop in demand in India was to be expected, as India rolled out two tax increases on gold. The second hike revealed in the country’s budget has since been withdrawn.
Gold demand in India was affected in Q1 2012 by a number of factors; a new tax on gold jewellery, two increases in the import duty for gold and weakness and volatility in the rupee. jewellery demand fell 19% to 152.0t from Q1 2011. Investment demand was down 46% from the previous year at 55.6t. In May, the government withdrew the new tax on jewellery and the market is already responding positively.