Domestic gold demand recovered 9 per cent to 223.1 tonne in the July-September quarter driven by a late revival of the monsoons and restocking by traders ahead of the festive and wedding seasons, according to the World Gold Council (WGC).
The demand stood at 204.8 tonne in Q3 of 2011, the WGC said in its 'Gold demand trends report:Q3' released on Thursday.
However, in value terms, the demand grew by 27 per cent to Rs 65,373 crore, compared to Q3 of 2011.
The late revival of the monsoons and restocking by traders and jewellers ahead of the festive and wedding seasons could be the key reasons for the upward trend in demand in Q3, the report pointed out.
"After a slow start to the first half, Q3 witnessed a gradual pick up in gold demand ahead of the festive and wedding seasons that falls in Q4. Against the backdrop of a slowing economy and persistently high inflation, this upward trend is encouraged by the country's socio-cultural affinity and the significance of gold as an effective store of wealth is likely to continue through the end of 2012," WGC Managing director for investment Marcus Grubb said.
Moreover, consumers here also seem to have adjusted to the rise in gold price levels is likely to be positive for demand in the country, he added.
During the reporting quarter, jewellery demand saw an increase of seven per cent year-on-year to 136.1 tonne from 126.8 tonne in the corresponding quarter last year.
In value terms, jewellery demand rose by 25 per cent to Rs 39,880.2 crore from Q3 of 2011. Investment demand in tonnage was up 12 per cent to 87 tonne from 78 tonnes in the same quarter last year.
Gold ETFs have seen a record influx of Rs 500 crore in the last quarter, WGC quoted the Association of Mutual Funds in India.
It added that the country's top two exchanges NSE and BSE recorded a total turnover of over Rs 2,200 crore in gold exchange-traded funds (ETFs) on Dhanteras on November 11 - an auspicious occasion for gold buying as per Hindu tradition.
The total traded value of gold ETF on the NSE stood at a record value of Rs 1,337 crore, while the BSE recorded a turnover of Rs 894.55 crore, the two exchanges said separately.
The imports also grew by 9 per cent to 223 tonne compared to 205 tonne in the same quarter last year.
Till date the country's total imports till September stood at 604 tonnes, while the total imports in 2011 was 969 tonnes.
"We expect the imports improving during Q4 as the last quarter is very strong for the country due to marriage season," Grubb added.