Gold jewellery demand likely to rebound after note ban

Demand bounces back but uncertainty over GST rate for jewellery casts a shadow for future

India’s gold jewellery demand is likely to increase 17 per cent in 2017 on a bounce-back after demonetisation.

India Ratings, in its latest study, forecasts India’s gold jewellery demand at 600 tonnes in 2017, which is equivalent to the last five years’ average. The World Gold Council (WGC) estimated India’s gold jewellery demand at 514 tonnes in 2016.

“Jewellery demand remains robust, given India’s demographics and wedding-related purchases. Demand is likely to rebound to above a five-year average of 600 tonnes in 2017,” said Harsha Sodhani, an analyst with India Ratings.

India’s gold demand plunged 21 per cent in 2016 to 675.5 tonnes