Gold buyers may have a cracker of a Diwali this year as the positive news on the Brexit front and the optimism building up around a US-China trade deal have helped the yellow metal climb down from its peak levels seen about a month ago.
Spot gold, as quoted by the India Bullion and Jewellers Association Ltd (IBJA) on Friday, stood at ₹38,330 per 10 grams (PM rates for 999 purity), down by about ₹1,000 from the peak of ₹39,188 in September 4.
The softening of prices could not have come at a better time as ‘Dhanteras’ — the first day of Diwali considered auspicious for buying gold — falls next Friday.
Speaking to
At Gujarat’s jewellery markets, the momentum is gradually picking up with people trickling in to buy for festive, ceremonial and investment purposes.
“Demand is improving but at a slow pace. We believe there will be last-minute rush for gold during the festivities.
“Prices have stabilised, which has given confidence to the buyers,” said a leading jeweller in Ahmedabad.
He sees more demand for coins than jewellery, pointing to a preference for investment.
International gold has also corrected by about $70 an oz from the peak of around $1,560 an oz to about $1,490-92.
This, combined with a stronger rupee, has spurred optimism about global trade and economic developments.
Concerns galore too
However, experts believe that despite the positive developments, gold prices haven’t corrected to the desired levels.
“Global optimism is fine, but domestic situation isn’t too good. More people are selling gold scrap than buying fresh gold. We are seeing growing trend to convert gold to cash,” said Haresh Acharya, director, IBJA.
Acharya believes nationally, on average, the sales are just about 50 per cent of last year, with the northern and western markets reporting just 30 per cent of last year’s numbers. South and East have fared little better with about 60 per cent of last year’s sales.