Gold traders pray for good monsoon to drive up sales

NEW DELHI: The above-normal monsoon this year is expected to drive purchase of gold in India. Demand for gold jewellery, coins and bars is expected to increase to 1,000 tonnes in 2016-17 from 950 tonnes last year, said Ved Prakash, managing director of MMTC, the country's largest foreign trading company.

“Demand for gold is expected to remain strong this season, with the forecast of a good monsoon. Major buying will take place from the rural parts, with sales touching 50 tonnes during the post-harvest period. Annually, 30% of gold demand comes from rural India,“ said Prakash. On days like Akshya Tritiya, gold sales should pick up, he says.

“We expect gold sales pan-India to be close to 50 tonnes during May. In the last two months, gold sales was 25-30 tonnes,“ he said.

The monsoon this year will be 106% of the long-period average following two years of deficit rainfall, the IMD said in April. A good monsoon will result in people buying gold, says Rajesh Khosla, managing director of MMTC-PAMP India.

“Post-Akshya Tritiya, gold sales might pick up with jewellers liquidating their stocks and that will carry over till June third week.Then in September, sales will pick up,“ Khosla said.