Gold usage in technology increased by 11% year-over-year, with continued demand driven by the AI trend in the sector.
In the second quarter, gold demand, excluding over-the-counter (OTC) transactions, decreased by 6% year-over-year to 929 tonnes. This decline was mainly due to a significant drop in jewellery consumption, despite small increases in all other sectors. When OTC investment is included, total gold demand showed a 4% year-over-year increase to 1,258 tonnes, marking the highest Q2 level since 2000.
The high price of gold affected jewellery consumption in Q2, with volumes falling by 19% year-over-year to a four-year low of 391 tonnes. On the other hand, central banks’ net gold purchases increased by 6% year-over-year to 183 tonnes, driven by the need for portfolio protection and diversification.
Global gold exchange-traded fund (ETF) holdings saw a minor decrease of 7 tonnes in Q2, contrasting with a 21-tonne drop in Q2 2023. While there were significant outflows at the beginning of the quarter, there were some inflows later on. Retail investment in gold bars and coins saw a 5% decrease to 261 tonnes, largely due to weak demand in Western markets.
Mostly people who are into investment and purchasing gold are more dependent on various apps as the selling and purchase of digital gold has been on the rise since it doesn’t need direct purchase yet it is easily accessible with a digital account. Additionally, gold usage in technology increased by 11% year-over-year, with continued demand driven by the AI trend in the sector.
In July, Finance Minister Nirmala Sitharaman proposed a reduction of 6 per cent customs duty on gold and silver and 6.4 per cent on platinum to improve domestic value addition in gold and precious metal jewellery in India. Major players in several states reportedly saw their share prices rise by over 10 per cent during intraday trades.
Earlier, the customs duty charged on gold and silver was 15% and 15.4% for platinum. The customs duty on platinum was raised to 15.4% from 10.75% earlier in October 2022, while gold was increased to 15% in July 2022.
Also, read| Gold Prices In Kerala Hit Their Lowest In July After Budget Announcement
