Low gold prices drive demand ahead of Diwali
Mumbai-India (Oct 21) Dussehra, Dhanteras and Diwali, these are the 3 Ds of Indian calendar that get jewellers and goldsmiths excited... and this excitement is more palpable than it was last year.
The 2013 festive season took a hit from multiple fronts -- raw material supplies were abysmally low as the government clamped down on gold imports, and a 10 percent import duty on the yellow-metal scuttled demand by forcing prices higher. But this is not the case this year.
Gold prices have already dropped around 8 percent and as of the October 19, prices in Bangalore stood at Rs 25,800 per 10 grams, against last year's all-time high of Rs 35,000.
Reason enough for a marked spike in interest from the consumer.
“People are moving to branded jewellers. People want to know what value and service they get,” said Indira V, Store Manager, Tanishq.
Eye-popping designs aside, it's the steep discounts jewellers are offering that has gold-buyers lining up along with the fact that gold makes a strong long-term investment is just icing on the cake.
“It is an occasion to show new things -- clothes, gold. It is also a good investment. If there are discounts, people tend to buy more. Gold helps when you have a rainy day,” says Vidya, a gold customer.
According to another customer Mirzi: “Gold prices have come down. That's why I came to buy jewellery. Usually, the fluctuations are low. That's why I invest in gold."
Experts say lower gold prices this year was a given, considering gold imports have surged four-fold in anticipation of higher sales.
In September alone, India imported 3.75 billion dollars worth of gold -- that's a 450 percent jump from year-ago levels.
Jewellers say that with prices set to go higher as the wedding season kicks in, the early bird will get the nugget.
Vinay J, Store Manager, Shubh Jewellers, says: “This is the best time to buy gold. When the marriage season comes, the demand will be high, prices will go up. At present, this is the best time.”
The World Gold Council had predicted that the second half of this year would witness demand for gold exceeding 380 tonnes... and with both buyers and sellers trying to make hay while the festive season lasts, this estimate may not be far off the mark.
Source: MoneyControl
