MUMBAI - Indian gold demand is likely to recover in the second half of 2021 from 35% below the pre-pandemic five-year average in the first half, as festivals and weddings are likely to boost retail purchases in the fourth quarter, the World Gold Council (WGC) said on Thursday.

Higher demand from the world's second-biggest gold consumer could support global prices that have corrected nearly 4% so far in 2021, although a rise in imports of the precious metal would widen India's trade deficit and weigh on the rupee .

"Consumer demand is trying to make a recovery. It will spike once normalcy is restored on the COVID front," Somasundaram PR, regional chief executive officer of WGC's Indian operations, told Reuters.

New infections of COVID-19 in India have fallen to around 40,000 per day from more than 400,000 in May.

The second wave of COVID-19 hit India badly during the June quarter and forced authorities to impose local lockdowns, hitting gold demand during wedding season and a key festival, Akshay Tritiya, when buying gold is considered auspicious.

In the June quarter, demand was 76.1 tonnes, nearly 57% below the five-year average in 2015 to 2019, the WGC said in a report published on Thursday.

Lower demand in the June quarter pulled down total demand in the first half of the year to 216.1 tonnes, one-third below the pre-pandemic five-year average.

In the fourth quarter, key festivals, such as Dussehra and Diwali, coupled with the wedding season could lift gold purchases, Somasundaram said.

"The number of auspicious days for weddings are more in the fourth quarter. Postponed weddings might happen during this period," Somasundaram said.

Weddings are one of the biggest drivers of gold purchases in India as bullion in the form of jewellery is an essential part of a bride's dowry and also a popular gift from family and guests.

(Reporting by Rajendra Jadhav; Editing by Sonali Paul) ((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))