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India's 2018 gold demand to remain sedate at 800 tonnes: World Gold Council

India
Highlights

Gold demand in India is likely to remain below its 10-year average for a third year in 2018 as higher taxes and new transparency rules on purchases may cap last year\'s rebound in buying, the World Gold Council (WGC) said on Tuesday.

MUMBAI: Gold demand in India is likely to remain below its 10-year average for a third year in 2018 as higher taxes and new transparency rules on purchases may cap last year's rebound in buying, the World Gold Council (WGC) said on Tuesday.

HIGHLIGHTS

  • For a third year, gold demand in India is likely to remain below its 10-year average at 700-800 tonnes
  • Gold demand will lag because of a higher GST on bullion purchases and measures to track gold purchases

India is the world's second-biggest gold consumer and lower demand there could rein in global prices that have risen 8 per cent since mid-December, although a drop in imports of the metal would help India reduce its trade deficit.

Gold consumption in 2018 will likely be between 700 and 800 tonnes versus 727 tonnes last year, Somasundaram PR, the managing director of WGC's Indian operations, said on Tuesday. Indian demand has averaged 840 tonnes over the last 10 years.

Gold demand will lag because of a higher goods and services tax (GST) on bullion purchases imposed in 2017 and measures to track gold purchases, he said.

In July, the GST on gold was raised to 3 per cent from 1.2 per cent. India has also made it mandatory for customers to disclose their tax code, or Permanent Account Number (PAN), for high-value gold purchases.The government moves have disrupted the business of the small jewellers that account for nearly two-thirds of India's total sales, Somasundaram said.

India is the world's second-biggest gold consumer and lower demand there could rein in global prices that have risen 8 per cent since mid-December, although a drop in imports of the metal would help India reduce its trade deficit.Gold consumption in 2018 will likely be between 700 and 800 tonnes versus 727 tonnes last year, Somasundaram PR, the managing director of WGC's Indian operations, said on Tuesday.

Indian demand has averaged 840 tonnes over the last 10 years.Gold demand will lag because of a higher goods and services tax (GST) on bullion purchases imposed in 2017 and measures to track gold purchases, he said.In July, the GST on gold was raised to 3 per cent from 1.2 per cent. India has also made it mandatory for customers to disclose their tax code, or Permanent Account Number (PAN), for high-value gold purchases.

The government moves have disrupted the business of the small jewellers that account for nearly two-thirds of India's total sales, Somasundaram said.

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