Indian gold demand fell 39% at 204.1 tons in the second quarter according to data released by the World Gold Council (WGC) last week. Gold jewelry demand was also down 18% at 154.5 tons.
Import duties leftover from a currency crisis in 2013 have stifled Indian gold demand from their origination through this Q2.
Although the duties were supposed to have been repealed, they still haven’t been. Here’s why – plus two reasons the country’s demand will pick up quickly in the latter half of 2014…
global gold demand
How This Indian Wedding Tradition Drives Global Gold Demand
An Indian wedding tradition dating back thousands of years is more than a simple cultural practice - it has become one of the biggest drivers of global gold demand.
In a Feb. 12 CBS News' "60 Minutes" report, correspondent Bryon Pitts took a look at how the Indian wedding tradition of draping the bride in gold jewels has propelled India to be the biggest source of global gold demand. India is now No. 1 in gold consumption of jewelry as well as physical bars and coins.
India accounts for about 32% of the global gold market with half of the gold Indians buy spent on jewelry for the 10 million weddings held there each year.
As a result, gold prices typically rise ahead of wedding season as families prepare.
"The demand for gold out of India is fundamental for the health of the industry," Ajay Mitra of the World Gold Council told Pitts. "If India sneezes, the gold industry will catch a cold."
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