Demand for gold may record a drop in June amidst the second wave

Demand for gold may record a drop in June amidst the second wave
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Gold demand in India might record a drop in the upcoming June quarter. this comes in the wake of the second coronavirus wave.

The impositions of the weekend and local lockdowns is rising day by day. Therefore, it is causing a damp in the celebration of festivities as well as wedding functions.

Demand for gold had seen a surge after the virus seemed to have receded. But the surge in gold demand couldn’t stay for long.

So far the gold prices have managed to rise by 6 per cent in 2021. Meanwhile, the faltering demand for gold could lead to lowering the trade deficit of India and balance the ailing rupee.

As per, the managing director of the World Gold Council Indian operations, Somasundaram PR “Weddings, the Akshaya Tritiya (festival) are going to be a very muted affairs.”

In the month of June, gold demands peak due to wedding celebrations and upcoming festivals. He also added that the country purchases around 200 tonnes of gold during the June quarter but the expected demand this year is lower than that.

India is undergoing the worst crisis along with worsening economic growth. Today the cases have spiked over 4 lakh. Somasundaram has mentioned that the consumption of gold in the second half of 2021 might rebound in case the economy revives.

The Indian economy however is expected to rise by 11 per cent in FY2021-22.

In the March quarter, gold demand saw a surge by 37 per cent from the last year to 140 tonnes. Also gold imports increased by 262 per cent in consecutive years as per a report published by WGC.

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