Investment in Gold is Protection in Bad Times”: A Study of Consumer Demand and Resale of Gold in India during Covid 19 Pandemic

Abstract

Gold is considered the safest investment by people in India. It is also considered as the asset that safeguards people in bad times which drives them to purchase it as investment. Hence, the present study has been conducted to study consumer demand for jewellery and gold bar & coin as well as its price during the period of Covid 19 pandemic and to examine recycling/ scrapping of gold during the times of Covid 19 Pandemic to protect them against the adverse effect of the pandemic. The present study covers the period of 12 Quarters i.e. 6 Quarters of COVID 19 Pandemic in India (Q 2’, 2020 to Q 3’, 2021) and 6 Quarters prior to COVID 19 Pandemic (Q 4’, 2018 to Q 1’, 2020). The study found that during the lock down and second wave of the Covid in India, there has been significant effect on the overall consumer demand of gold in India. It is interesting to see that during the first wave of the Covid, there has been significant increase in overall consumer demand of gold in India. It was found that during the quarter after lock down, the scrapping and recycling of gold was the highest. The reason of the highest scrapping and recycling of gold was loss of employment, unemployment, exodus of the labourers to their home states from the other parts of the sub-continent. There has been adverse impact on trade and industry due to lock down which has resulted into salary cut or loss of employment. Hence, people sold the gold for their livelihood and fortunately they got good return on their investment because there has been significant increase in price of gold during covid in India.