India's Gold Demand Falls Amid Higher Customs Duty and Modi Appeal

India's gold demand in the April-June quarter decreased by 6% to 131.4 tonnes, down from 139.7 tonnes in the same period last year, according to the World Gold Council (WGC). The government increased the import duty of gold and silver from 6% to 15% in May this year, leading to higher prices.

The WGC regional CEO for India, Sachin Jain, noted that demand has decreased in quantity but reached a record value. Despite the increase in customs duty and Prime Minister Narendra Modi's appeal to reduce non-essential gold purchases, consumers are buying gold at higher prices.

Investment demand remained encouraging, with demand for bars and coins increasing by 9% to 50.3 tonnes. Indian Gold ETFs saw an inflow of 4.2 tonnes despite global outflows. The WGC has estimated the total demand this year to be between 650 and 750 tonnes.