Economic recovery likely to boost gold demand in India this year: WGC

According to a report by the World Gold Council (WGC), demand of Gold appears to be positive in India as the consumer sentiment is likely to recover in 2021 from its dismal performance due to the Coronavirus pandemic-related disruptions and volatile price movement.

Initial data about the Dhanteras festival in November suggest that while jewellery demand was still below average, it had substantially recovered from the lows seen in the second quarter (April-June) last year, according to the report.

The report, titled ‘Gold Outlook 2021- Economic recovery and low interest rates set the tone’ also said although global economic growth is likely to remain anaemic relative to its full potential for some time, gold’s more stable price performance since mid-August may foster buying opportunities for consumers.

It said the economic recovery is likely to be realised in countries like China, which suffered heavy losses in early 2020, before the spread of the pandemic is controlled more effectively than in many western countries.

However, with the global economy operating well below potential and gold prices at historical high levels, consumer demand may remain subdued in other regions, the report added.

While there is still uncertainty about how 2021, may evolve, it seems likely that mines will experience fewer stoppages as the world recovers from the pandemic, it said.