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Gold is glittering this Dhanteras

By Ians English
Google Oneindia News

New Delhi/ Chennai/ Mumbai, Oct 21: Gold is glittering this Dhanteras as jewellers are experiencing good sales driven by better prices compared to last year.

"We expect sales to be 20 percent higher this year compared to last year as gold price is ruling at a better level than last year. There is a lot of traffic in the shop today," Rahul Gupta, chief executive officer, P.P. Jewellers in New Delhi, told IANS.

Last year, there was a supply crunch of gold in the market after the government hiked its import duty to 15 percent to curb higher import as that was causing imbalance in the current account deficit in the country.

"This year the price went below Rs.27,000 per 10 grams mark a fortnight back, but now there is price increment of Rs.1,000-Rs.1,200 per 10 grams," he added.

Gold price was around Rs.27,700 per 10 grams in the national capital Tuesday.

Prime Minister Narendra Modi Tuesday greeted the people of the nation on the occasion of Dhanteras. "Greetings on Dhanteras. May Lord Dhanvantari bless us with prosperity, joy and good health," Modi said in a statement.

N. Anantha Padmanabhan of NAC Jewellers in Chennai told IANS: "We expect the footfalls to increase and brisk sales happening in the evening. Till now the sales are average. The sales growth may be 10 percent over the previous year. Last four/five days it was raining and we thought higher sales to happen."

According to the Assocham's recent survey, about 72 percent of the 1,200 respondents said they preferred gold as an investing option followed by shares and mutual fund schemes this Diwali, helped by extra earnings from bonuses.

"We expect sales to be good this Dhanteras as the price is good. During the last six-eight months, silver sales were dim. So we expect sales to go up today (Tuesday)," Jayantilal Challani, president of Madras Jewellers and Diamond Merchants Association and a partner in Challani Jewellery Mart, told IANS.

However, lower prices of gold have not lured buyers in Mumbai to buy the precious metal on the occasion of Dhanteras, market players said Tuesday evening.

The prices have come down from around Rs.32,000 per 10 gm to around Rs.28,000 per 10 gm this year, but the market sentiments are hit by overall inflation and higher interest rates, arresting sales, said Mumbai Jewellers Federation President Rakesh Shetty.

"Owing to these factors, the market has been cool till evening, we expect at least a 35 percent drop in gold sales compared to 2013. The current retail price in Mumbai is Rs.27,750 but the majority of customers are only making token purchases of jewellery between Rs.3,000-Rs.6,000," Shetty told IANS.

P.R. Somasundaram, managing director, World Gold Council (India), said gold demand on Dhanteras mirrors the general optimism in the economy, reinforcing the traditional faith in gold for the average household as a saving and its increased economic relevance due to various uncertainties on the horizon.

"Policy restrictions have had little impact on gold demand, though sources of supply have increasingly shifted to unauthorized channels... It is time for a long-term approach to gold in India, unlock the potentially transformative value of the household gold to fund the nation's growth," he said.


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