WGC has positive outlook on the future of India's gold jewellery market
On May 18, the World Gold Council (WGC) disseminated a report that showed a positive outlook for the future of India’s gold jewellery market, despite a prediction of future pressure on the industry.
The WGC has listed India and China as the world’s two largest jewellery buying markets and has predicted that demand will increase in India in the long term, despite pressure, due to shifting demographics in the country. The report, entitled “Gold 2048: The Next 30 Years for Gold”, stated that jewellery demand will continue to grow in developed markets but that real growth will take place in emerging markets in India, such as from newly wealthy rural customers.
John Reade, the Head of Research and Chief Market Strategist at the WGC, said: "In the near term, Indian gold demand will increase substantially if the government is successful in its ambition to dramatically increase rural income." However, Reade also said that such growth would be expected to slow down somewhat in the long term.
The report predicted that, India, gold will continue to be considered one of the main designators of wealth but that other products will also become more prevalent. As younger generations tend to value expensive electronics over gold jewellery, this prediction seems likely.
The report also noted India’s potential for recycling gold, of which it has around 25,000 tonnes of stock. This could decrease the need for importing such a large amount of gold, the report said. India’s gold jewellery market is becoming increasingly organised and this trend is also expected to continue, according to the WGC.
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