New Delhi, May 2 (IANS): The World Gold Council (WGC) on Thursday said that the Model Code of Conduct, in place for the ongoing Indian elections, which restrict anyone from carrying over Rs 50,000 cash without documentation proving the source and end use may act as a headwind for gold demand in the current quarter.

The WGC report, however, said that so far, the market has been largely unaffected by the restrictions on cash movement that came into force mid-March.

On the trend during the quarter gone by, it noted a robust demand. "India wedding purchases and lower prices lifted Indian gold jewellery demand to 125.4 t (plus 5 per cent y-o-y)," it said.

"The first half of the quarter was subdued; the month-long inauspicious period of Kharmas or Malmas ended in mid-January and was followed by a sharp rise in the local gold price, hitting Rs 33,730/10g by the third week of February."

Prices then swiftly retreated, falling to Rs 32,000/10g by the first week of March, and consumers took advantage of the correction, rushing to make wedding-related purchases and pushing the local price to a premium, it added.

Besides, a higher number of auspicious days boosted wedding-related demand. There were 21 auspicious wedding days in the Hindu calendar during Q1 2019 - three times that of Q1 2018, which was a crucial factor behind the growth in India's jewellery demand.

The WGC was positive on the jewellery demand.

".. jewellery demand will likely be boosted in Q2, by traditional wedding season buying, the Akshaya Tritiya festival on 7 May and higher crop prices than last year," the report said.