Indian gold demand in 2014 will fall below last year's record levels as import restrictions are expected to remain in place, despite an improvement in demand in the second half of the year, the World Gold Council (WGC) said.
Demand in 2014 will be 850-950 tonnes, the industry body said, down 50 tonnes from its earlier forecast. China's demand forecast was also lowered to 900-1,000 tonnes from an earlier 1,000-1,100 tonnes.
The forecasts put consumption in India and China below record purchases of 974.8 tonnes and 1,120.1 tonnes respectively last year, when gold prices slumped 28 percent after a 12-year bull run. Global gold demand fell 16 percent in the second quarter, according to WGC's quarterly report released on Thursday.
In India, tough rules on imports - which have hurt demand - could remain in place for the rest of the year, as uncertainties over oil prices and U.S. monetary policy could deter the government from any easing, said Somasundaram PR, head of the WGC's operations in India.
Struggling with a high trade deficit, India last year raised its gold import duty to a record 10 percent and made it mandatory to export a fifth of all bullion imports. Gold is India's second-biggest expense on the import bill after oil.
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