New Delhi, Nov 26 (IANS): The gold jewellery retail industry expects a demand recovery in H2FY21 driven by higher number of occasions like festivals and weddings, rating agency ICRA said on Thursday.

The segment had witnessed a sharp 64 per cent contraction in H1FY21.

An ICRA survey of its rated gold jewellery retailers said: "The gradual opening of stores post the Covid-19 pandemic induced lockdowns was supported by a steady improvement in footfall although these were still much lower than last year."

"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."

As per the survey report, the industry grappled with a decade-low level of demand during FY2020, battling multiple headwinds like weakened consumer sentiments amidst a sharp rise in gold prices, subdued rural output, and fall in consumer surplus.