According to the World Gold Council, India will see its demand for gold drop by almost 19 percent in 2012 from last year.
The drop will primarily be because of decreased consumption in the first two quarters of the year.
Back in 2011, demand for gold was around 986 tons. By the end of this year, that figure is likely to be revised to 800 tons.
"During the first two quarters of this year, the demand for gold was low because of jewellers strike due to custom duty, weak monsoon, among other factors," said [World Gold Council Director Investment, Amresh] Acharya here.
The festival season, which in India comes toward the end of the year, did increase demand for gold, but demand over the first three quarters was just 600 tons compared to 800 tons for the same period in 2011. There was a national surge in demand between 2006 and 2011—up to 39 percent.
From 710 tons in 2006, demand went to 986 tons in 2011. India and China account for nearly 50 percent of the world’s gold demand.
Despite a global supply constraint, the Indian overall consumption of gold is expected to grow at a healthy rate. From $420 billion in 2006, consumption is expected to increase to $1.73 trillion by 2025.