NEW YORK (Scrap Register): Bars and coins demand in India was encouraged by lower prices and equity weakness. India’s bar and coin demand picked up during the third quarter of this year to reach 34.4tons, but remains below its three-year average of 43.3t, according to the World Gold Council.
August was the strongest month of the quarter as the domestic gold price fell below Rs29,700/10g, dropping to its lowest 2018 level.
The bar and coin market is predominantly the preserve of the urban India investor – rural investors typically invest in 22ct jewellery.1 Urban investors are more likely to hold a well-diversified portfolio and, for them, equity market volatility created an unsettling backdrop. In September the BSE Senex fell 6% and has continued to tumble in October, supporting demand for bars and coins.
The picture was similar elsewhere in Asia. A fall in the gold price, tumbling equity markets and depreciating currencies in Vietnam, Thailand, Indonesia and Malaysia boosted bar and coin demand. But other country specific factors were in play.
Malaysia benefited from the removal of 6% GST and rumours remained rife in the Thai market that the government may follow India’s lead and clamp down on unaccounted money.