The yellow metal lost its glitter on back of the demonetisation drive, as per World Gold Council (WGC). “An initial rush for gold following the policy announcement came to a swift halt in the ensuing cash crunch,” according to trends in the WGC report for 2016. The report estimates that the gold demand in India fell 21 per cent in 2016 not only due to demonetisation but also jewellers’ strike and other tighter disclosure measures like quoting of PAN. Jewellery demand too plummeted by over 22 per cent from 662 tonne in 2015 to 514 tonne in 2016. However, despite rural communities being hit hardest by the cash crunch, WGC expects healthy income from good monsoons to lend support to gold demand going forward.

olmdesk@outlookindia.com