India's Gold Demand Falls by 6% in April-June Quarter Amid Higher Customs Duty

India's gold demand fell by 6% year-over-year to 131.4 tonnes in the April-June quarter, weighed down by seasonally subdued sales and higher Customs duty. This is a decline from the 139.7 tonnes recorded during the same period last year. Despite the decrease in tonnage, the total value of gold demand reached a record Rs 1,98,100 crores, up 50% from the previous year's second quarter.

Sachin Jain, Regional CEO of India for the World Gold Council (WGC), attributed the decline to seasonally subdued sales and Prime Minister Narendra Modi's appeal to reduce non-essential gold purchases. The WGC estimated that total demand will remain between 650 and 750 tonnes for the year.

Jain expressed concern about a rise in grey marketing after the duty hike, noting reports of illicit gold entering the market. He emphasized the importance of tracking this trend in the coming quarters. Investment demand remained strong, with bar and coin demand growing 9% year-over-year to 50.3 tonnes.