India's Gold Demand Surges 50% Despite Prime Minister's Warning

India's gold demand saw a significant surge in the June quarter, despite Prime Minister Narendra Modi's public call to avoid buying gold. According to data from the World Gold Council (WGC), Indians spent close to Rs 2 lakh crore on gold in the quarter, a 50% increase in value terms over the same period last year. The demand for gold was 131.4 tonnes in volume terms, down by 6% against 139.7 tonnes in the year-ago quarter due to increased import duties.

However, this did not deter the amount spent on gold, which saw a 50% increase to Rs 1.98 lakh crore. The higher prices and import duties also contributed to the growth. While jewellery demand was down by 15% to 75.1 tonnes, bar and coin purchases went up by 9% to 50.3 tonnes.

Value-wise, bar and coin demand was up 73% as people remained optimistic about gold's importance as an inflation hedge and investment asset. Gold ETF demand also saw a 49% increase to 4.2 tonnes. Recycled gold was down 17% to 19.2 tonnes due to high duties.

According to Sachin Jain, Regional CEO of the WGC, consumers are adapting their purchasing decisions to balance affordability with long-term value. The festive and wedding season in the second half is expected to support demand, despite elevated prices.