India, China ramp up gold purchases as market starts recovering from pandemic pain

The demand for physical gold increased sharply in the spring season in India, China and other Asian countries, where the precious metal’s shine is appreciated the most, Nikkei reports, citing industry data.

Statistics showed that India, one of the top gold consumers, imported 160 tons of the yellow metal in March, 5.7 times more than in the same month a year ago, when the country was under strict lockdown. Gold purchases in the country practically stopped in April and May 2020, but started growing again since the end of the year. In India, gold is a highly valued status symbol, offered at weddings and other festivities. A large part of the population keeps their savings in gold jewelry. 

Purchases of jewelry were also up in China, 2.6 times year-on-year in February, data showed. The beginning of last year saw demand in the world’s biggest gold consumer tumbling to multi-year lows, again due to the coronavirus crisis.

Global demand for gold dropped to its lowest levels since 2009 in the third quarter of 2020, according to World Gold Counsil data, partly driven by dwindling demand in Asia. The pandemic has forced traditional buyers to postpone purchases and investors to ditch holdings, while lockdowns have hit the jewelry market. China and India have seen a drop in demand of 25% and 48% respectively in the first three quarters of 2020.

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