Jewellers are buying gold to meet the upcoming wedding and Akshaya Tritiya demand, they said. This has prompted bullion dealers in the spot market to charge a higher premium from jewellers. “The demand is good and has gone up further as the prices have come down. Jewellers are stocking gold at this price which is why the premium has gone up from $4 per ounce to $5 per ounce,” said Prithviraj Kothari, national president of India Bullion & Jewellers Association.
Gold prices fell to a 10-month low of Rs 44,000 per 10 gm last Friday.
“We expect gold prices to remain sideways in the short term as vaccination drive across the globe picks up pace which will lead to full normalcy in economic activities. The expectation of a rise in inflation due to excess liquidity globally may help gold prices in the medium to long-term,” said Nish Bhatt, CEO of Millwood Kane International, an investment consulting firm.
Bankers dealing in bullion termed the decline in gold prices a temporary trend. “We do not think that this fall in gold prices will be for a very long period. Maybe this is a three-month phenomenon. Gold will continue to remain an important asset class for Indians. Fundamentals remain positive for gold,” said Shekhar Bhandari, president, Global Transaction and Precious Metals at
.
Aditya Pethe, director of Mumbai-based WHP Jewellers, said, “Demand has been going up since last Diwali and the recent price fall has also given a fresh boost to it. Investment demand in the form of bars and coins have almost dried up. Equities are appealing to investors more.”
Another Mumbai-based jeweller, Ishu Datwani, founder of Anmol Jewellers, said: “We are witnessing all stations being occupied with customers. In the last 15-20 days, walk-ins have almost doubled. Ticket size has also improved because we are mostly entertaining bridal customers. Price is a factor that’s driving people to purchase, but designs still are the key. The way things seem to be going, I don’t think the fresh wave of Covid will impact the demand going forward.”
Gold price will continue to be impacted by economic and social uncertainties, said Ahammed MP, chairman, Malabar Gold & Diamonds. “Despite the volatility in gold price, gold has reinforced its safe haven status banking on the uncertain economic scenario. As a result, gold demand has strengthened. Overall, demand outlook for gold remains strong, as consumers are looking at the yellow metal as a dependable investment instrument,” he said.
