Consumer and gold trade sentiment may remain soft in India through 2020, the World Gold Council (WGC) said in its latest report 'Outlook 2020'.

“In India, policy reforms designed to bring transparency and an orderly trade structure to many sectors of the economy are expected to improve confidence, remove inefficiencies and promote growth. We expect these factors to be a long term positive for gold demand although their effects may take time to become apparent,” stated the report. Structural reforms taken in the country may help in the longer run, added the report.

The report also said risk appetite will be amid high uncertainty. Until tax cuts are introduced as a credible incentive to spur economic growth – the infrastructure for which may not be available until 2021 – higher taxes are exacerbating the impact of the record high local gold price on consumption.

We expect that the interplay between market risk and economic growth will drive gold demand in 2020. In particular, we focus our attention on: 

•  Financial uncertainty and lower interest rates
• Weakening in global economic growth
•  Gold price volatility