Gold demand in India dims amid soaring prices: Report 

The World Gold Council (WGC) on Tuesday expressed concerns that gold prices reaching near record highs may diminish the demand for gold in India during the country's peak festival season.

India, the world's second-largest gold consumer, is now witnessing a potential drop in gold purchases, which could lead to the lowest buying volumes in three years, stated the WGC.

The surge in gold prices in India, particularly in the December quarter, which traditionally sees the highest sales of the year, is expected to limit purchases during the festive season.

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Reuters cited Somasundaram PR, the regional chief executive officer of WGC's Indian operations, as saying that local gold prices have surged this week, nearing the all-time high set earlier this year. Last year, gold prices during the December quarter were nearly 20 per cent lower compared to this year.

Typically, gold demand in India strengthens towards the end of the year, coinciding with the traditional wedding season and major festivals such as Diwali and Dusherra, where purchasing gold is considered auspicious. However, the soaring prices could potentially reduce the demand.

While gold consumption in India during the July-September quarter increased by 10 per cent due to a correction in local prices, overall demand for the year is expected to decline by around 3.3 per cent, according to Somasundaram. This could result in 2023 seeing the lowest demand for gold in three years.

Higher gold prices have also led some individuals to sell their old jewellery and coins, resulting in a 37 per cent surge in scrap supplies in the first nine months of the year, as reported by WGC data. The trend is likely to continue into the December quarter if gold prices remain at their current levels.

(With inputs from Reuters)

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