As bullion imports improved during the July-September period on a quarter-on-quarter (QoQ) basis, a Motilal Oswal report has said that the improved demand shows revival in confidence among jewellers about the strong festive and wedding demand anticipated in the fourth quarter of 2020.

Citing the recent World Gold Council data, the report said that net bullion imports, which contribute 85-90 per cent of India's gold supplies, saw a sharp recovery in third quarter of 2020 (3QCY20) after a deep plunge in the quarter before that. While gross imports and exports both plunged sharply in 2QCY20, the revival in exports was much lower than that in imports in 3QCY20.

Accordingly, while net bullion imports had fallen 96.4 per cent YoY to just 9 tonne in 2QCY20 amid stringent lockdowns, the volumes saw a sharp rebound to 90.5 tonne in 3QCY20, up 8.2 per cent. Although the growth is on a soft base of 3QCY19, it comes after four consecutive quarters of decline, it said.

"We believe this rebound is indicative of jeweller confidence in the strong festive and wedding demand anticipated in 4QCY20. Titan indicated in its post results call last week that the first 10 days of the festive season has been in positive territory," the Motilal Oswal report said.

As per the World Gold Council's latest data jewellery demand was severely affected during July-September with volumes down 48 per cent YoY to 52.8 tonne in 3QCY20. The demand was impacted by recurring lockdowns, unprecedented gold prices, and inauspicious periods based on religious beliefs, the report said. "Nevertheless, there was a modest sequential recovery of 20 per cent QoQ in the gold jewellery demand," it said.