Amidst fears the country's gold demand reached the benchmark Rs 30,600 crore (Rs 306 billion) in the third quarter of the current calendar year as against Rs 18,434 crore (Rs 184.34 billion) in the comparable period last year.
In tonnage terms, however, the metal recorded a 31 per cent growth, at 250 tonnes in Q3, 2008 as compared to 190 tonnes in Q3, 2007.
According to Gold Demand Trends launched by the World Gold Council (WGC) on Wednesday, the demand for gold jewellery in the country reached 178 tonnes, a rise of 29 per cent in tonnage over the same period during the previous year despite a deteriorating economic situation creating a greater squeeze on consumer spending. In monetary terms, however, this equated to a rise of 78 per cent from Rs 12,300 crore (Rs 123 billion) to Rs 21,900 crore (Rs 219 billion).
After a sluggish start to the quarter, a gold jewellery demand surge was driven by the rural boom and with urban consumers wanting to safeguard their investments. Much of India experienced a good monsoon rainfall, which resulted in a "feel good" factor boosting rural spending on gold during the festive season, a WGC release said.
Total investment demand for the yellow metal boosted by the pullback in the gold price during the third quarter. After a fairly sluggish start to the quarter, gold jewellery demand surged as a sharp drop in the gold prices prompted a frenzied rush among consumers. From July 15 to August 15 gold price fell 21 per cent in both rupee and dollar terms.Global meltdown: Complete coverage