Gold prices may rule firm if central banks continue to buy: WGC
Gold prices are unlikely to see a correction in the short term, thanks to the purchases made by central banks of dierent countries and the present geopolitical uncertainties, Sachin Jain, Regional CEO, India, World Gold Council (WGC) has said.
He attributed one of the reasons for prices to surge to the 290 tonnes of gold bought by India, China, Turkey in the first quarter of the calendar year. “When a central bank buys gold, it is not based on demand and supply but for making their country stronger at whatever price. If a country decides that their reserves have to go up, they will buy at whatever price”, he told businessline.
RBI, in the first quarter, bought 19 tonnes of gold, and they continued to buy in April against 16 tonnes during the entire 2023. “If this trend continues, we believe that the outlook for gold remains strong”, he said.
Moreover, the recent report of moving 100 tonnes of gold to India by RBI from London reflects how strong India is and wanting to have its assets close, he said Asked whether the prices should go up from the current levels, Jain said “I think if something very stupid happens in the world, the prices of gold might go crazy”.
Q1 DEMAND UP 7%
Jain, who was in Kochi as part of a reception organised by the All Kerala Gold and Silver Merchants Association, said traditionally, consumers tend to wait and watch whenever the prices
India’s total gold demand in Q1 was 136.7 tonnes, up by 8% against 126.3 tonnes in Q1 2023
of gold go up. It was only in February that the price was slightly stable, thereby wooing consumers. From a jewellery consumption point, he said the sector witnessed about a 7 per cent rise in terms of volume and about almost 13 per cent increase in terms of value in the first quarter. India’s total gold demand in Q1 was 136.7 tonnes, up by 8 per cent against 126.3 tonnes in Q1 2023.
As the price rallied to successive record highs, investors remained bullish, contributing to the robust demand. Investments into gold ETF’s too saw positive inflows of over 2 tonnes, he said.