The increase in demand was further fueled by the Reserve Bank of India s (RBI) robust gold purchases. The central bank purchased over 19 tonnes of gold during the initial quarter of the current calendar year 2024.
"The sovereign gold bond offers choices to investors to invest (in “paper gold”). You get a certain yield from it as well. I don t see why that would be a negative for the gold market as a whole. I think it s encouraging people to see gold s value as an investment commodity and a stabilizer to their household or institutional income. So no, I don t see it as a threat (to the physical gold trade). I would be very surprised if it grew to such an extent to be a threat," says David Tait.
"The sovereign gold bond offers choices to investors to invest (in “paper gold”). You get a certain yield from it as well. I don t see why that would be a negative for the gold market as a whole. I think it s encouraging people to see gold s value as an investment commodity and a stabilizer to their household or institutional income. So no, I don t see it as a threat (to the physical gold trade). I would be very surprised if it grew to such an extent to be a threat," says David Tait.
Gold demand in India surged 10% YoY in Q3, reaching 210 tonnes, driven by lower prices and robust rural demand. Despite concerns about El Nino and a patchy monsoon, the World Gold Council (WGC) estimates India s annual consumption to be 700-750 tonnes for 2023. The WGC s Q3 Gold Demand Trends report also highlighted strong global demand, with central bank purchases contributing to a 1,147-tonne demand, 8% above the five-year average.