Gold Demand drops for 10 year low

Mumbai Nov 10: The World Gold Council WGC has published a report regarding the demand for gold in the world and India. The main highlights of the report are

The Global demand for gold slipped to 650 tonnes in 2017, compared to a 10-year average of 845 tonnes.The nation's gold demand in the July-September quarter dropped 24 percent from a year ago to 145.9 tonnes.

Two-thirds of India's gold demand comes from rural areas, where jewelry is a traditional store of wealth.

The demand would be weak in coming quarters as the monsoon rains did not fall evenly around the country this year, hitting incomes in some farming areas.

The traders have said that the fall in demand is because of the following reasons

GST

The higher tax rate of 3 % on gold compared to 1.2-2 % on gold has affected the sales of the yellow metal and Jewellery

New Money laundering rules

The Government has tightened the rules for purchase of gold and also banned cash transactions of above RS 2,00,000.

Gold Monetisation scheme and Sovereign bond scheme

The RBI has introduced the gold bonds for investors and this has also reduced the demand for the gold.