- India’s 2010 gold demand rose 66% and hit 963 tonnes in volume terms and US$38bn (+106%) in value terms. Even as demand from Western markets shrunk, India and China raised their gold consumption in 2010 accounting for almost all the growth in global demand. Demand from rural India surprised positively, driven by the healthy monsoons and higher minimum support prices (MSPs) from the Government.
- Estimated that gold accounted for a high 9% of household savings in FY11.
- At US$29bn, India’s jewelry demand alone was almost at par with FII net inflows into the Indian equity markets in 2010.
- India’s gold investment demand (10% Cagr in the past five years) continues to out pace jewelry demand (5% Cagr). WGC notes that over 2000-2009, “the value of gold demand in India has increased at an average rate of 13% per year, outpacing the country’s real GDP growth by almost 6%.”
- India’s traditional demand for gold during festive occasions (Diwali, Akshay Trithiya) and marriage seasons remains deeply embedded as part of culture. Rising incomes will drive aspiration values and maintain gold as a ‘status symbol’
Read more at HDFC Securities report .http://www.hdfcsec.com/Research/ResearchDetails.aspx?report_id=2975425
Gold Bird 