Impact of Covid-19 on Gold in India
The demand for gold jewellery was already low in the last year due to a number of reasons such as US-China trade war, interest rate cuts by various central banks worldwide, economic slowdown worldwide, increased gold prices, etc. Ongoing lockdown across India to curb Coronavirus outbreak has put a further dent on its demand. Let’s understand its impact on various aspects of gold:
- As per the report of India Ratings and Research (Ind-Ra), gold jewellery sales are expected to decline by 25% in 2020-21(April-March). The demand for jewellery is primarily driven by marriage season and festivals and due to the ongoing nationwide lockdown, it has been significantly washed out.
- According to World Gold Council report, the demand for gold jewellery fell 41% during the March quarter to an 11-year low
- Gold supply is also disrupted as mine production fell to five-year low of 795.8 tonnes
- Due to low demand from consumer end, the total gold import in India is also likely to drop to a decade-low in 2021