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India’s festival gold sales to shine less brightly this year, says WGC

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According to the World Gold Council, India’s gold sales during the year-end festival may lose its luster after a significant increase in 2021, and customers won’t flood stores this time.

Demand for gold jewellery, coins and bars typically peaks between October and December in the world’s second largest consumer. This will be boosted by the spate of events of Diwali starting next week and subsequent weddings. In the fourth quarter of last year, jewelery sales nearly doubled as consumption rebounded after his two years of tough times dominated by the pandemic.

Indians have purchased a record 344 tonnes of gold in the period, and sales this year are unlikely to match that, said PR Somasundaram, regional chief executive of the London-based organization. said in an interview with Bloomberg Television on Tuesday.

“There is no doubt that demand will be higher than in the first half of this year, but it will not be as good as last year,” he said. “Inflation is somewhat high, but it is not perceived as a crisis here. So gold is only showing a seasonal rally and there is no critical pressure on gold at the moment.”

Gold is often seen as an inflation hedge, but the global precious metals market has been hit hard by the dollar’s surge in recent months, keeping prices subdued.

According to Somasundaram, India’s annual gold demand could reach 750 tonnes in 2022, not far from last year’s 800 tonnes. The sale of digital gold via apps and the web has also “triggered people’s interest,” he said.

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