High gold prices keep traders on edge ahead of festive season
Spiralling gold prices have left jewellers and traders anxious about the offtake of the yellow metal in the upcoming festival season from September to December.
By Deepa Krishnan, TNN |
MUMBAI: Spiralling gold prices have left jewellers and traders anxious about the offtake of the yellow metal in the upcoming festival season from September to December.
The gold price which touched a 25-year high in April ’06 is currently up by close to 50% from last September. Standard gold (99.5) closed at Rs 9,475 per 10 gm on Tuesday.
According to Arun S Kaigaonkar, chairman of Chintamani Jewellers and founding member of the Mumbai Gold Club, the sales of gold are currently lower by 50% in grammage terms. However, he said volatile prices have a greater impact on sales compared to the rise in prices.
“If gold prices fall, the customers believe that there is a possibility of prices falling further and hence they wait to make purchases. Since gold has gone up steadily since last year, the customers have reconciled to high prices,” he said.
Domestic gold prices have been fluctuating over the last year on the back of rising international prices. Investors view the yellow metal as a safe investment in times of geopolitical tensions.
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Harmesh Arora, vice-president, Bombay Bullion Association and MD of NIBR Bullion, said: “Offtake among jewellers is usually high during this period as they build up inventories. In comparison, it is lower this year.” However, he said in the last fortnight there has been a 30% increase in sales. Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
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