India's gold demand during July-September quarter this year shot up by 39 per cent to 225.1 tonnes against the overall third quarter demand in 2013 on rise in jewellery sales, says a World Gold Council report.
The overall third quarter demand in the country for 2013 stood at 161.6 tonnes, WGC Gold Demand Trends report showed.
Gold demand during the period in terms of value rose by 31 per cent to Rs 56,219.3 crore as compared to Rs 42,829.6 crore in the third quarter of 2013.
Similarly, the total jewellery demand was up by 60 per cent at 182.9 tonnes as against 114.5 tonnes in the same period last year.
The value of jewellery demand surged by 51 per cent to Rs 45,681.6 crore from Rs 30,346.5 crore in the third quarter of 2013.
"The rise in demand for gold jewellery during third quarter of 2014 reflects the unusual low base of third quarter of 2013 that was impacted by the introduction of a range of duty increases and restrictions.
"The third quarter can be viewed as normal for gold demand in spite of the unfulfilled expectations of a duty cut and policy relaxations from the new government," WGC Managing Director (India) Somasundaram PR told PTI here.
He further said that demand around Diwali reflected the general optimism seen in the country.
"It is now beyond debate that import restrictions have had little impact on demand for gold and yet have strengthened the unauthorised supply channels and seems at odds with the overall sentiment that defines the new government's business approach," he added.
However, the investment demand during the third quarter declined by 10 per cent at 42.2 tonnes as compared to 47.1 tonnes in the same period of last year.
In value terms, gold investment demand saw a drop of Rs 10,537.7 crore from Rs 12,483.1 crore in the third quarter of 2013.
Total gold recycled also declined to 18.2 tonnes during the quarter as compared to 53 tonnes in the third quarter of last year.
Gold demand in India for the full year is likely to be 850?950 tonnes, Somasundaram said.
"The fourth quarter is traditionally an important quarter and we expect the demand for gold to be better than the third quarter.
"The softening of price, which has been dropping consistently over the year, will act an incentive for demand.
The investment will also rise if the price keeps declining," he said.
When asked about the import, he said it is going to be better than third quarter. But, the overall imports for 2014, is going to be less than 2013.
In 2013, the total gold import stood at 825 tonnes, which also includes import from unauthorised sources.
He further said that the policy environment should allow the gold trade to operate in a free and transparent manner, enabling the industry to embrace a bigger vision of becoming the 'jeweller to the world'.