Mumbai, November 27: The gold and the jewellery industry expects a demand recovery in H2FY21. According to a report published by ICRA, the industry believes that demand will improve on the back of occasions like festivals and weddings. The gold jewellery retail industry had witnessed a sharp 64 per cent contraction in H1FY21.

A positive trend highlighted in the survey was that the opening of the stores post the coronavirus pandemic induced lockdown has seen a steady improvement in footfall although these were still much lower than last year.

The report further mentioned, "Further, factors like rising preference towards gold as an asset class, favourable rural output amidst good monsoons, expectations regarding the further rise in gold prices etc are likely to support demand in the next few months."

The industry is grappling with a decade-low level of demand during FY2020, battling multiple headwinds like weakened consumer sentiments amid a sharp rise in gold prices, subdued rural output, and fall in consumer surplus.