Anticipated Equaling of Record Gold Jewelry Recycling in India for the Current Year

 Anticipated Equaling of Record Gold Jewelry Recycling in India for the Current Year

According to the World Gold Council, Indians are likely to sell a record amount of used gold jewelry this year in order to take advantage of the high domestic prices of the precious metal. If local prices continue to rise, the sales of recycled bullion are expected to increase by over 20% and match the previous peak of 119.5 tons recorded in 2019, as stated by P.R. Somasundaram, the regional chief executive officer for India at the World Gold Council. This trend is likely to result in India importing less gold this year. The reduced purchases by the second-largest gold importer in the world could exert downward pressure on international prices, which are currently around $1,960 per ounce. Over the past 12 months, Indian gold prices have increased by nearly 20%, more than double the global increase, due to the devaluation of the rupee, making gold more expensive.

Gold is a popular investment in India, especially in rural areas where banking services are limited. Farmers often buy gold after a successful harvest and may sell it later to purchase seeds, fertilizer, or other necessities. Indian households and temples collectively hold approximately 25,000 tons of gold. If this year’s monsoon season is poor, it could further boost the sales of used gold, although it is too early to predict as the rainy season has just begun, according to Somasundaram.

Data from the World Gold Council shows that Indian sales of recycled gold, which includes bullion and jewelry sold for cash, increased by 25% in the first three months of 2023 compared to the same period the previous year, totaling around 35 tons. Meanwhile, purchases of bullion decreased by 17% to 112.5 tons during that period.

Ashish Pethe, the former chairman of the All India Gem and Jewellery Domestic Council, mentioned that historically, about 25% of gold transactions consisted of sales of old jewelry for every 100 grams of gold. This percentage may reach 35% to 40% this year due to rising prices, Pethe stated.


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