Chennai: Even though India’s gold demand fell by 25 percent during the second quarter of 2015 due to a buoyant stock market and softening of the rural economy, the World Gold Council (WGC) expects the overall demand for the year to be around 900 tonnes, a top official said on Thursday.

He also said that India should have a major say in fixing the international gold prices as it accounts for nearly one-third of the gold mined per year.

“Consumer demand for gold during the second quarter was 154.4 tonnes (jewellery 118 tonnes, investment 36.5 tonnes) down from 204.9 tonnes (jewellery 152.6 tonnes, investment 52.3 tonnes) as compared to the corresponding period of 2014,” Somasundaram P.R., managing director, WGC-India, told reporters here.

In value terms, gold touched Rs.37,590.20 crore during the second quarter of 2015, down from Rs.50,7758.10 crore during the corresponding period of 2014.

According to Somasundaram, the demand for the yellow metal fell due to a buoyant stock market and a softening of the rural economy affected by unseasonal heavy rains and fewer auspicious days that impacted wedding season demand.

However, the fall in demand was only seven percent during the first half of 2015 at 346.2 tonnes as compared to 372 tonnes during the corresponding period in 2014, Somasundaram said.

According to Somasundaram, one has to see the reaction of the consumers to the rising gold prices now and also how the monsoon prediction plays out.

He said the proposed gold monetisation scheme of the central government may not reduce the overall demand for gold though the scheme would bring into the market old gold for recycling.

“Globally, recycling of gold accounts for 33 percent of the demand while in India it is 16 percent. When the GDP (gross domestic product) goes up, there will be demand for gold,” he said.

He said the expected interest rate hike by the US has been factored in the gold prices.

“One should also look at the impact of interest hike by the US on the Indian rupee. What surprised the industry was the devaluation of the Chinese yuan,” he said.

Speaking of gold exchange-traded funds, Somasundaram said it has come down to around Rs.6,500 crore from around Rs.13,000 crore last year.

However, it had good prospects in the long term, he added.

According to him, smuggling of gold had come down significantly this year.