NEW DELHI (Scrap Register): Indian gold jewellery demand during the second quarter of this year was down from a strong Q2’17, falling 8% to 147.9 tons (t) due to high local prices and seasonal factors, but was in line with the long-term average, according to the World Gold Council.



The y-o-y drop in gold jewellery demand was magnified by the jump in demand seen in Q2 last year when consumers rushed to make gold purchases before GST was implemented on 1 July.



In a longer-term context, Indian jewellery demand was relatively healthy, just 1% below the five-year quarterly average of 149.1t and 3% higher than average Q2 demand over the preceding ten years (144.1t).



Demand was boosted in April by Akshaya Tritiya and the wedding season, before fizzling out. India’s gold trade reported brisk demand during the festival, despite relatively high local gold prices at that time.



And wedding-related purchases supported demand early in the quarter. This positive effect soon wore off however, as the rupee continued to weaken against the US$, keeping the domestic gold price elevated.



Adhik Maas – an inauspicious time for Hindus – was also a contributing factor to the y-o-y decline. Adhik Maas is an additional month in the Hindu calendar, which occurs every 30-36 months in order to align the lunar and solar calendars.



It is considered an inauspicious time for events such as weddings, so tends to have a dampening effect on gold jewellery demand. The start of Adhik Maas in mid-May coincided with the local gold price moving quite sharply into discount versus the US$ price.