Gold sales tank on high prices
Mumbai, Oct. 18: The insatiable demand for gold by speculators, as indicated by the record high prices of the metal, has badly affected physical demand in India — the world’s largest gold consumer.
Gold sales in India peak in October-November due to buying for the Navratri, Dussehra, and Diwali festivals, and the wedding season. However, this year the sky-rocketing prices have led to a 25-30 per cent drop in demand, industry officials said.
Sales in the south, where shops are generally abuzz ahead of the festival season, have been “negligible” compared with previous years.
Most traders in south India concur that sales volumes were unusually down by 30-40 per cent, while in the west and east, sales were relatively better, but still down around 20 per cent. “Demand is poor as spot prices are above `20,000 per 10 gm. Off-take from jewellers, which was around 175-200 kg a day has drastically declined to 10-15 kg,” said Mr Ranjeeth Rathod, MD of MNC Bullion, a Chennai-based importer.
Developed economies are seen easing monetary policies more to boost economic growth, and this is expected to push international prices to around $1,400 an ounce by the end of the month. Tracking this trend, domestic gold prices are also expected to reach `21,000 per 10 gm by October-end, analysts said
“Due to the rise in prices, we may expect an increase of around 25 per cent, but volume is likely to decline, said Mr Bachraj Bamalwa, head of Nemichand Bamalwa and Sons.
Mr Vipul Mehta, director of Laxmi Jewellery Export Ltd said, “Demand is extremely slow as most investors are still waiting for a correction in prices.”
Mr Pinakin Vyas, assistant vice-president, treasury at IndusInd Bank said, “It is volatility rather than high prices that is killing dem-and for gold.”
Post new comment