In the long run too, gold faces challenges as households are saving less than before, reducing the amount of capital they allocate to gold, as described on the ‘driver of Indian gold demand’. A WGC report said. Simultaneously, it said, financial inclusion is on the rise, providing investors with other sources for their savings beyond physical gold which may also affect the gold appetite in the country.
The report said that government policies could affect gold demand and inadvertently boost India’s informal market, indicating that any increase in import duties on gold in the coming days could be responsible for smuggled gold. can open doors. At present, an import duty of 12.5 per cent is levied on gold.
The WGC said rural India, which accounts for 60% of the country’s gold consumption, may spend less than usual on gold because agricultural wages are still declining despite government action in recent years.
But there are also positive factors, which could boost gold demand in the long term, the report said. Rapid growth in the working age population over the next two decades will yield a strong and sustained demographic dividend. Second, continued urbanization will accelerate and support economic expansion. And third, greater access to both manufacturing and service sectors in rural areas will reduce dependence on agriculture and provide more stable income for millions of households.