Mumbai: Gold purchases by Indians this year are forecast to tumble to a record low as the coronavirus pandemic hurts the economy and prices surge to all-time highs, according to the World Gold Council.
Consumption fell 56% from a year earlier to 165.6 tons in the first half of 2020 and the drop is unlikely to be made up during the rest of the year, P.R. Somasundaram, managing director for India, said in an interview. “Going by what we are seeing now, lockdowns are still continuing in many parts of the country and it will be a very, very challenging year. It must be one of the lowest perhaps we have ever seen.”
Virus-related lockdowns in India since the end of March shuttered businesses and left millions jobless. Factories have reopened even as the epidemic in the country is now growing at the fastest pace in the world. Gold prices in India have also rallied to record highs, damping demand.
“For gold demand to survive, the economy has to do well,” Somasundaram said. “There is also a lot of anxiety among people regarding incomes and lot of people from the unorganized sector are not doing much business. Whatever savings people have, they will put it into the businesses or pledge gold to raise money. They will not put that into buying gold.”
However, demand could jump by 350 tons in a single quarter “if life as we know it comes back,” he said. A sense of optimism is developing among jewelers that by the festival of Diwali, in November this year, virus-related disruptions may matter less as people learn to live with it, spurring consumer confidence and jewelry demand, he said.- Bloomberg
News media is in a crisis & only you can fix it
You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust.
You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism.
We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And we aren’t even three yet.
At ThePrint, we invest in quality journalists. We pay them fairly and on time even in this difficult period. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is. Our stellar coronavirus coverage is a good example. You can check some of it here.
This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it. Because the advertising market is broken too.
If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous, and questioning journalism, please click on the link below. Your support will define our journalism, and ThePrint’s future. It will take just a few seconds of your time.