Mumbai, May 3: The gold demand in India declined by 12 per cent in the first quarter of this year to 115.6 tonne compared to the same period last year due to high local gold price, the World Gold Council (WGC) said in a report.
The total demand stood at 131.2 tonne in the January- March period in 2017, WGC said in its 'Gold Demand Trends' report for Q1 2018.
In terms of value, the gold demand fell by 8 per cent to Rs 31,800 crore, compared to Rs 34,440 crore in the same period of 2017.
"The decline in demand can be attributed to a number of reasons, including the rising local gold prices, a substantial drop in the number of auspicious wedding days during the period compared to the previous year, and anticipation of an import duty cut in the Union Budget," WGC, India, Managing Director P R Somasundaram told PTI here.
"The transition to GST, especially by the unorganised sector, also affected demand to a certain extent," he said.
Also, the trade sentiment was subdued following the (PNB) bank scam, which continued till 'Akshaya Tritiya', he added.
The jewellery demand in India for the first quarter dipped by 12 per cent to 87.7 tonne, compared to 99.2 tonne in the same period of 2017.
In value terms, the jewellery demand during the period dropped by 7 per cent to Rs 24,130 crore, from Rs 26,050 crore in the corresponding period last year.
The total investment demand for January-March was down by 13 per cent at 27.9 tonne against 32 tonne in the same quarter last year.
In value terms, the gold investment demand in the first quarter of this year was Rs 7,660 crore, a fall of 9 per cent from same period of 2017, which stood at Rs 8,390 crore.
The total gold recycled in India also declined by 3 per cent during the first quarter of 2018, to 14.1 tonne from 14.5 tonne in the same period of 2017.
"The first quarter in India is not naturally a dynamic period for gold as people usually settle their other financial commitments for tax purposes. Moreover, there was also no
catalyst like duty cut to trigger demand," Somasundaram said.