If you saw the headlines last week, you know overall global gold demand fell steeply in the third quarter of this year. But as we reported, there was a lot of good news for gold buried beneath the gloomy headlines.
Slumping Q3 gold demand in India was a big driver in the overall global decline, but even there, we see some signs of optimism. Indian gold-buying dropped off primarily due to new taxes and regulations imposed by the Indian government over the summer. There are already signs the market is adjusting
On July 1, the Indian government replaced a labyrinth of taxes with a nationwide 3% Goods & Services Tax (GST). New anti-money laundering legislation also impacted the jewelry market.
After three consecutive quarters of growth, gold demand in India fell 24% year-on-year in Q3 to 146 tonnes compared with 192.8 tonnes in Q3 2016. The drop in jewelry demand was most significant, likely a byproduct of the new taxes and regulations. Jewelry demand fell by 25% to 115 tons in the third quarter compared to 152.7 tons in the previous year.
This post was published at Schiffgold on NOVEMBER 13, 2017.