October to December is the festive season with Diwali, Dhanteras and the wedding season as well. While 2020 was a forgettable year, did Q4 provide any sort of reprieve?
Yes, absolutely right. First of all, globally, it is a 11-year low but when it comes to India, it is a 25-year low. But the quarter has been very different. While the overall demand has dropped by 35%, in Q4 (Oct-Dec), we saw a drop of just 4% which means that we did make up for some of the losses we had in Q2 and Q3.
Interestingly, in Q4, in rupee terms, it was up 26% because the price had jumped so much. People were waiting and for the same amount of money, they have got less gold because the prices have gone up by 32% in Indian rupee terms. While Q4 was a positive story, we expect the doom and gloom to continue into 2021.
What are you seeing in January? Has the growth accelerated or is it too early to say anything right now?
It is a very difficult thing to say right at the beginning of the year. We expect gold demand to come back because people have rescheduled weddings. They did not celebrate many occasions in 2020, all of which should come back in 2021 and therefore add to the demand. It is also possible that people still will not be able to spend much on travel in 2021. The resultant savings might flow into gold and contribute to revival of demand in a big way. We have to wait and see how the monsoon plays out and what happens in the Budget.
Gold has stayed stable since October. Has it contributed to any recovery at all?
Yes, there is now a general acceptance of the Rs 50,000 range as a new normal with the result people now like to see whether it is better off at Rs 49,000 or Rs 48,000 rather than Rs 52,000. So there is an acceptance and this will play out very positively in 2021.
What will be your expectation from the Budget?
The continuing expectation is that a time will come when the government will see that reducing duty is good for the industry as well as for the economy, bringing more and more people and more of more into gold buying which is very good for the economy in the long term.
Apart from that, what would be nice to hear is a timeline for all the announcements made in the last five years rather than any new announcement. Ever since 2015, every alternate year, we have had some announcement or other about gold. We need a timeline to execute what has been announced so far.
