Demand for gold in India is likely to be challenged by a lower household savings rate and lower agricultural wages, according to the World Gold Council. The WGC said in a report that higher income is one of the biggest drivers of gold demand, indicating that as the Indian economy grows, sales of the precious metal should increase. However, “households are saving relatively less than they did before, which could reduce the amount of capital they allocate for gold.” Other headwinds will emerge as more people access banks and financial products, providing investors with other sources of their savings, a lack of support from policy makers, and lower farm wages despite government measures in recent years, the report said. While economic growth has slowed due to the coronavirus pandemic, long-term prospects remain bright, fueled by demographic changes, increased urbanization, and shifts in the rural economy.
For 2021, jewelers are preparing for good sales in the festival quarter from October to December.