With Diwali and Dhanteras round the corner, gold buying is experiencing its seasonal spurt. From gold coins, gold jewellery , people in India are predictably flocking to gold in this festive season. Bookings for gold jewellery and coins have picked up.
In the run-up to Diwali, gold prices are expected to trade in the Rs 30,000-31,500 range following volatility in the price of the yellow metal in international markets and the fluctuation in rupee.
India is the biggest Gold loving nation with the highest consumption rates of gold. Greater China after India is also contributing huge to the graph of growth in gold rates and market strategies. According to the World Gold Council Gold demand fell to its lowest level in more than two years in the second quarter. Buying gold during festivals is considered auspicious in the country. Thats why there is always a hike in the prices of the gold during festival time as the business increases.
But of recently the trends are changing. Corporate gifting of gold and silver coins during this Diwali is on decline. Jewellers who had placed orders during the India International Jewellery Week (IIJW) last month are holding back physical delivery of gold. There is some reluctance among jewellers to create an inventory for the festive and wedding season. The shift away from gold and silver gifts is also being spurred by a younger generation that is more enthused by luxury goods.
Ruling high prices, weak monsoon, macroeconomic uncertainty and high inflation, which has reduced the disposable surplus income of the middle class, have hit demand for gold, which could drag down the country's imports to around 700 tonnes.It looks like there may be a pick up in demand, but compared to last year it will still be lower by up to 50 percent.
In the run-up to Diwali, gold prices are expected to trade in the Rs 30,000-31,500 range following volatility in the price of the yellow metal in international markets and the fluctuation in rupee.
But of recently the trends are changing. Corporate gifting of gold and silver coins during this Diwali is on decline. Jewellers who had placed orders during the India International Jewellery Week (IIJW) last month are holding back physical delivery of gold. There is some reluctance among jewellers to create an inventory for the festive and wedding season. The shift away from gold and silver gifts is also being spurred by a younger generation that is more enthused by luxury goods.
Ruling high prices, weak monsoon, macroeconomic uncertainty and high inflation, which has reduced the disposable surplus income of the middle class, have hit demand for gold, which could drag down the country's imports to around 700 tonnes.It looks like there may be a pick up in demand, but compared to last year it will still be lower by up to 50 percent.
I completely agree with you my friend. Speaking of Albeit gold, which brings smiles to the faces of Bahus (daughter – in laws) of the house, its recent spikes is a cause of worry for the Indian government as it has inflated the imported bills. To worsen the scenario the rupee depreciation adds strong support to the prices of gold. All this is mainly because India imports most of its gold. So it can be inferred that as far as rupee depreciates one can expect strength in gold, at least till the time un-certainities prevail around the globe.
ReplyDeleteRecent breaking of 30,000 is seen as bullishness but one should be cautious of announcements of Fed reserve as any decision which supports the dollar will add to negatives to the fundamentals of gold as they trade as chalk and cheese the world over. Domestically it should be noted that about a little less than 2/3rds of gold buying is done in rural areas and any convivial news from monsoon will always spurt the prices. A fact to be noted that gold prices tend to have a negative bias after Diwali season. So any buy after the festivities is considered to be a smart buy.