All the efforts of the Indian government to curb gold imports could well come to nought with gold demand in India expected to jump over 15% in Q4 when compared to the last quarter of 2012. Another 300 tonnes of gold could come into the country, becuase the fourth quarter is the harvesting season and good monsoons are set to translate to a lot of pent up demand, says the World Gold Council.

Somasundaram P, Managing Director at World Gold Council (WGC) India, speaking to the media in Mumbai, said that with 20% more auspicious days during the last quarter, consumers are eager to lap up gold, especially as prices had decreased slightly in the local market.

Official data too reveals a steep decline in poverty levels in recent years. Going by the common belief that gold tops the list of priorities, even before real estate, cars and other luxury items, demand is bound to increase for the precious metal, he added.

See also: Luxury-focused Indians swing for gold

Earlier, the WGC estimated the country’s overall gold demand would touch a record 1,000 tonnes in 2013.

After a lull of almost two months, gold imports have finally got the green light once again in the country. WGC has estimated that Indian gold imports during the July to September period were less than 100 tonnes. India imported around 567 tonnes in the first half of the calendar year.

Earlier, the WGC had urged the Indian government to embrace a long term and holistic approach to ensure that gold does not lose its shine in the Indian market. Vipin Sharma, Director (Jewellery), WGC, had noted that the recent restrictions on gold imports had fuelled an increased entry of the yellow metal through illegal channels.

Speaking at an event to mark the launch by the Council of Azva, a bridal jewellery collection inspired by the seven sacred vows taken during marriage in India, Sharma noted that demand continued to remain robust despite the steep hike in the price of the precious metal in the domestic market.

With the onset of the festive and wedding season in India, Sharma said the gold market would continue to remain robust. The WGC has conducted a study among 13,000 people across the country, which underlined the inherent demand showing that more than 50% bought gold during the wedding season and would continue to do so.

He added that the annual gold market in India has been in excess of 700 tonnes over the last 7-8 years, despite the price of gold rising from an average of $88.95 (Rs 5,500) per 10 gram in 2004, to more than $517.85 (Rs 32,000) per 10 gram in 2013.

A study conducted by PricewaterhouseCoopers for WGC has looked at the direct economic impact of gold, which takes into account the entire value chain from large scale mining supply to consumer demand. As Somasundaram pointed out, “Gold always does well in a crisis, but we will have to wait and see how specifically the US shutdown affects gold.”