According to WGC, demand for gold jewellery in the country reached 178 tonne, a rise of 29 per cent in tonnage compared with the same period in 2007, despite a deteriorating economic situation creating a greater squeeze on consumer spending. “It has been an outstanding quarter for demand in India, the world’s largest consumer of gold. I am encouraged by the fact that both investment demand in bars and coins and jewellery demand have surged against global credit crunch impacts our nation,” WGC managing director Ajay Mitra said. In currency terms, demand for jewellery saw a rise of 78 per cent, to Rs 21,900 crore from Rs 12,300 crore last year.

After a sluggish start to the quarter, gold jewellery demand surged driven by rural economic boom, urban consumers wanting to safeguard their investments. “Looking forward, we believe the uncertainties in the financial markets will continue, therefore, driving investors towards gold and its safe haven and insurance policy characteristics,” Mitra said.

Quarter three saw a record $18-billon demand for gold jewellery across the world, with buyers returning to the market on lower price points, around and below $800, the release said. The biggest contributor to the positive trend was India, which witnessed a rise of 65 per cent, in dollar terms, or 40 tonne compared with previous year levels, with the Middle East, Indonesia and China all enjoying rises of more than 40 per cent in value or 10 per cent in tonnage.

There was, however, strong decline in western markets with the US going down nine per cent in value and 29 per cent in tonnes, and the UK down 5 per cent in value and 26 per cent in tonnes due to the overall decline in the retail market.