Tuesday (July 20) According to the news, Moody's India division ICRA reported in a report that it expects demand for gold jewelry in India will rise to 800 tons in 2017, as gold prices gradually stabilized after rising.
ICRA previously estimated that demand for gold jewellery in India will fall by 5.7% year-on-year to 771.7 tons in 2016 due to rising gold prices.
According to statistics released earlier, India’s gold imports in the first half of 2016 fell 52% year-on-year to a seven-year low, dragged down by the Brexit boost in gold prices.
ICRA analysis pointed out that the fluctuation of gold price in recent years is the main pressure on demand. The soaring since the beginning of this year has directly led to the reduction of new purchases and has spurred the recovery of physical gold.
In addition to the recent stagnation of the gold price itself, ICRA believes that India's upcoming holiday season and rural demand will also support demand due to factors such as improved rainy season.
The agency pointed out that India will welcome a series of festivals including Diwali at the end of August. People will usually buy gold for a good luck, which will increase the demand for gold.
The agency also stressed that the Indian government is now re-aggregating the development of the rural economy, which may boost the demand for gold in the rural areas and the development of the jewelry industry in the next three years.
According to ICRA data, rural areas in India account for almost 60% of the country's annual gold demand.
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