The World Gold Council's latest report highlights that the demand for yellow metal is not where they were expected to be, largely due to the higher and volatile prices. The first quarter saw weak jewellery and investment demand. However, PR Somasundaram, Managing Director at World Gold Council believes that if prices rise over to Rs 64,000 mark, buyers will likely come back in large numbers. He added that he is expecting better demand in fourth quarter.
Notably, the physical buying has seen a very sharp decline and is 17 percent down currently. On a quarter on quarter basis, this is a very sharp decline. The last quarter of 2022 was a strong one. Diwali and wedding season witnessed strong buying and the prices were fine.
Despite this optimism, Somasundaram was cautious in his outlook for the second quarter, as he did not expect any major surprises. Akshaya Tritaya, a traditionally gold-buying festival in India, did not result in the expected surge in demand, and the numbers are expected to remain on the lower side for the next few months, he told CNBC-TV18.
Somasundaram said, “Akshaya Tritaya was not exactly a great time, although there are pockets which are good volumes. I don't expect the second quarter to surprise us again. It will be on the lower side."
However, Somasundaram mentioned that the monsoons and the fourth quarter of the year have historically thrown up surprises in the gold market.
While it is difficult to forecast these events, Somasundaram believes that if prices remain at this range and the monsoons are good, the fourth quarter could surprise us on the positive side.
(Edited by : Anshul)
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