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Industry & Economy - Gems & Jewellery


Jewellery demand may take a hit on higher gold prices

Our Bureau

Mumbai , Dec. 4

DEMAND for gold jewellery in the country during the current quarter (Q4) of 2004 is likely to be affected to some extent by the rise in the prices of the yellow metal in November, according to World Gold Council (WGC) report.

However, the year-on-year growth rate may not be affected since price volatility deterred purchasing towards the end of 2003 as well.

Monsoon rainfall this year was below normal and this would reduce rural income but the impact was expected to affect primarily the first half of 2005, the report said.

For the January-September period, gold demand increased at 485.5 tonnes, up 9.5 per cent over same period last year. It includes jewellery 411.5 tonnes and retail investment 74 tonnes.

"Retail investment demand, mainly driven by dollar weakness will continue to rise during the current quarter," Mr Sanjeev Agarwal, Managing Director (Indian Sub-continent) of WGC, said.

The net retail investment demand in the country surged by 16 per cent on year-on-year and 10.7 per cent in tonnage terms during the January-September 2004 period.

"In India, we have undertaken many promotional activities during the festival and wedding periods which have visibly paid off. The speak gold campaign appears to be influencing consumers favourably too," he said.

Gold jewellery demand in the country was 16 per cent higher in July-September 2004 period than a year ago.

"The gentle upward trend in the price during the quarter does not seem to have deterred jewellery purchasers in India. Indeed, the reports from the main consuming markets indicate that buyers are not only accustomed to prices in excess of $400 per ounce, but also that they are prepared for possible further price rises," he said.

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