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(Kitco News) - Gold demand was 43% higher in Q2 with wedding and festive buying cited as the main reason for the increase. In numbers, gold imports jumped 34% to 170 tonnes, while recycling increased 18% to 23 tonnes. Gold demand in the June-ended quarter was up 43% to 171 tonnes against 120 tonnes reported in the same period last year on the back of buying for wedding and festival season. In addition to this, jewelry demand increased 49% to 140 tonnes (94 tonnes) on a lower base as the demand was affected by the second wave of Covid-19 last year. Investment in the yellow metal was up 20% to 30 tonnes (25 tonnes).

In value terms, demand increased 54% while that for jewelry was up 60%. Investments rose 29%. Gold imports jumped 34% to 170 tonnes (132 tonnes) and recycling increased 18% to 23 tonnes (20 tonnes). Prices were up 8% per 10 grams against the same period last year. On a sequential basis, it rose 2% per 10 gram registered in the March quarter.

According to Somasundaram PR, Regional CEO-India, World Gold Council, Akshaya Tritiya and the wedding season gave a boost to the sales that were dented by the Covid pandemic in the March quarter. He further observed that the volatile equity market and expectation of high inflation spooking economic growth resulted in safe haven investment in gold.

However, the demand for gold in the second half of this year faces downside risks due to uncertainty over the economic outlook, higher import duty, and the possibility of additional curbs on gold buying in the wake of a fall in rupee value against the US dollar.

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