Recovery in India's gold demand remains uncertain in the second half of the year, the World Gold Council told CNBC.The precious metal plays an important role in India's culture — it is considered auspicious to buy gold during festive occasions.A woman tries a gold earring at a jewellery showroom in Mumbai, India on October 28, 2016.
India is one of the largest markets for gold. The precious metal plays an important role in India's culture — it's considered auspicious to buy gold during festive occasions or to give it as a gift at weddings. It is also seen as a symbol of affluence and a safe investment. Demand for gold typically increases in the second half of the year, when important festivals are held including Diwali and Dhanteras, as well as the wedding season, said Somasundaram PR, managing director for India operations at the World Gold Council.
"It is difficult to say how things will evolve this year as there are multiple factors that will shape recovery — the trend of the pandemic, disruptions out of localised lockdowns and price outlook," he told CNBC by email.Gold demand in India plunged in the first-half of 2020. A report from the World Gold Council in late-July said Indian jewelry demand fell 74% on-year to 44 tonnes in the three months that ended in June as spending on gold jewelry shrank.
The decline stemmed from a nationwide lockdown that was designed to slow the spread of the coronavirus outbreak, as well as higher gold prices, and uncertainties over future income, according to the report. Gold demand in India for the year is expected toWhen it comes to coronavirus, India is now the third-worst affected country in the world, with more than 2.6 million reported cases of Covid-19, though with a relatively higher recovery rate.