MUMBAI (Commodity Online): India's love affair with the yellow metal is gaining strength every year with the 2010 first half showing a 94 per cent rise in demand for gold in India as compared to the 2009 first six months.
The total gold jewellery demand in India remained robust in H1 2010. The volume of growth increased 67% to 272.5 tonnes as compared to 163 tonnes in H1 2009. In INR value terms, demand increased to Rs 45,700 crores an increase of 94%.
The volume of gold in investments was very strong and grew by 264% to 92.5 tonnes in H1 2010 as compared to 25.4 tonnes in the corresponding period. In terms of value, investments accounted for Rs 14800 crores in H1 2010 compared to Rs 3700 crores in H1 2009 an increase of 300%.
According to a report in Economic Times, 2010 has been a year which has provided a clear indication of the diversity of gold. As the year has progressed, the Indian gold market has grown significantly. This has therefore ensured in gold retaining its intrinsic appeal.
Demand for gold in India rose by 94% to 365 tonnes in H1 2010 as compared to 188.4 tonnes in H1 2009 clearly indicating that there has been a rebound in demand as compared to the previous year.
In value terms, India's gold demand grew from Rs 27,300 crores to Rs. 60,500 crores an increase of 122%. With the Indian marriage season coming up and important festivals like Dhanteras, Diwali and Onam on the anvil, the future seems to augur well for gold.
With India and China providing the main thrust to demand growth and investment increasing, the World Gold Council says there is no full stops for the bull run in gold.
The WGC said in its second-quarter Gold Demand Trends report that it believes a retreat in prices from the record $1,264.90 hit in June, better seasonal demand for the metal and a more neutral speculative picture all bode well for demand.
The WGC said the major Asian economies, China and India, are set to be the driving force behind gold demand, especially for jewellery. A recent proposal by China to develop gold trade in the country is likely to have a positive impact on consumption.
Elsewhere, global gold jewellery consumption fell just 5 per cent to 408.7 tonnes in the second quarter, the WGC said.
Indian gold jewellery consumption eased 2 percent to 123 tonnes, while jewellery offtake in Greater China, comprising China, Hong Kong and Taiwan, rose 5 percent to 82.3 tonnes. Chinese net retail investment more than doubled in the same period to 37.7 tonnes from 14.7 tonnes.
Overall gold investment demand more than doubled in the second quarter to 534.4 tonnes, the WGC said, representing 51 percent of total identifiable demand of 1,050.30 tonnes for the period.
In the second quarter of 2009, investment represented just 32 percent of overall demand, while jewellery accounted for 56 percent of total consumption.
Investment demand in Europe was particularly strong as the euro zone sovereign debt crisis hit in the second quarter. European gold retail investment more than doubled quarter-on-quarter to 84.8 tonnes.
This represented 40 percent of global demand from this market segment, the WGC said, compared with 7 percent two years earlier, while Europe was the source of a third of demand for small gold bars and coins.
Recycled gold volumes rose 35 percent to 496 tonnes from 366 tonnes a year ago, reflecting higher prices tempting sellers to the market. However those volumes were below the record 606 tonnes of recycled material returned to the market in the first quarter of 2009.