Due to the unprecedented Covid-19 pandemic and high prices, the gold demand last year plunged to the lowest in 25 years to 446 tonnes compared to a 35% drop to 690 tonnes in 2019. Gold jewelry demand fell even sharper by 42% to 316 tonnes while that of investment was down 11% to 130 tonnes.

The demand was down 14% at ₹1.88 lakh crore from ₹2.17 lakh crore while jewelry demand dipped 22% to ₹1.33 lakh crore from ₹1.71 lakh crore. Investments in gold increased 20% to ₹55,020 crores (₹45,980 crores) in terms of value. Then the gold prices zoomed to ₹42,182 per ten grams against ₹31,542 logged in 2019. Despite signs of revival in gold sales due to falling prices in the December quarter, gold sales dipped 4% to 186 tonnes from 194 tonnes, and that of jewelry dropped 8% to 137 tonnes from 149 tonnes. But, investment demand was up 8% to 49 tonnes. Gold demand in value was ₹82,790 crore, an increase of 26% compared to ₹65,890 crores logged in the December quarter of 2019. Jewelry and investments were up 21% and 41% at ₹61,060 crores and ₹21,730 crores. Despite the sharp rise in prices of gold, recycling was down from 29 tonnes to 22 tonnes reflecting consumers’ affinity to gold and for 2020 it plunged from 119 tonnes to 96 tonnes.

In the December quarter, gold demand dipped 31% to ₹44,474 tonnes from ₹33,912 per 10 grams. Last year’s imports were down 47% to 344 tonnes from 647 tonnes in line with weak demand. Still, pointing to the positive impact of pent-up demand in the December quarter rose 19%.