[1]Just two days before Akshay Tritiya, gold prices have touched another high internationally. Price of gold in Europe traded close to $1,250/oz as inve-stors try to hedge their bets.
Investors in Europe and elsewhere are spooked by the possibility of a debt default by some of the weaker governments, whi-ch can lead to more financial problems. Meanwhile, in India, there could be some impact on the consumer sentiment — people will still purchase gold, say experts, but the volume could be lower because of the higher price.
Gold prices haven’t touc-hed an all time high in ru-pees, yet. This is because the Indian rupee has appreciated against the dollar in the recent months. Howe-ver, the price of gold in the Multi Commodity Excha-nge (MCX) in Mumbai was Rs 18,125/10 gm — this is about 0.5 per cent less than the peak level seen in December ’09.
Gold sellers — which also include banks and the post office apart from jewelers, are worried by the rising prices. “20-25 per cent of our gold sales happen during the month of Akshay Tritiya,” says Mr Seshan Ramakrishnan, head of retail liabilities, HDFC Bank. “If prices go up, sales are likely to be lower,” he adds.
During 2008 and 2009, India’s gold imports had dropped drastically as customers cut back on purchases in face of higher prices. India’s annual consumption of gold usually ranges from 700-800 tons, according to the World Gold Council, an industry body. Jewellery accounts for almost 70 per cent while investment — in form of bars and coins, accounts for most of the remainder.
The jump in gold prices is because investors are looking for a safe haven amidst the uncertainty in the Eurozone economies, says Mr Tarun Satsangi, assistant vice-president, Bona-nza Commodity Broker.
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