The sale of gold in India drops significantly ahead of Diwali with its prices touching a record high of Rs 77,410 per 10 grams, moving up by Rs 600 from the previous close. This spurt in the price of gold has set consumers to rethink their purchases, IBJA claimed. Silver prices have also gained ground, touching Rs 92,283 per kg from Rs 91,600 the previous day.
It is reported that jewellers are worried by the rise in price at which gold is selling in India, ahead of Diwali’s biggest festival. Traditionally, gold sales pick up during the festive season. However, the price rally now is creating enough to offset the high cost of gold on sales. In a bid to attract customers, most jewellers have cut down the making charges, but that may also not be enough.
Sale of gold in India drops as prices rise due to geopolitical tension
A combination of factors-the current geopolitical risks in the global scenario, and a weakening rupee, now nearing the 84-mark against the US dollar-are compelling the sale of gold in India. A stronger dollar makes the precious metal more expensive here as gold imports into the country. Increased tensions in the Middle East are also driving the uptrend in gold prices as investors bid for yellow metal as a safe haven.
While sales of gold in India weaken before Diwali, market experts predict further price increases. Analysts feel that in the short term, the bullion metal will touch Rs 78,500, which will have a stiff support level at Rs 75,000. The price volatility is pushing consumers to buy lower volumes as they are shelling out more money for the same volume of gold. This has subsequently decreased overall demand.
The bullish sentiment on gold due to trimmed-down expectations for interest rates and geopolitical tension still exists, although a festive sell-off in gold in India may turn subdued this year.
Also, see: Chennai-based company gifts expensive cars and bikes to employees ahead of Diwali