Gold will glitter yet, but now in rural areas

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Gold softens on fall in demandRBI buys 200 MT gold from IMFGold at record high of Rs 16,254/10 gmGold edges higher to Rs 15,916 per 10 gms

New Delhi: People in small towns and rural areas are likely to contribute more to the jewellery business in the country as they purchase more ornaments compared to people living in the metros, experts say.

"Jewellery sales will continue to grow more in rural areas, tier I and II cities, as compared to the metro and other large cities," All India Gems and Jewellery Association President Ashok Minawala said.

Echoing similar sentiments, P M Shah Jewellers' Dinesh Jain said that the sector is likely to witness growth of 40-60 per cent in rural areas and 10-15 per cent in urban areas.

"In rural areas, people are buying jewellery as a means of investment and also for marriage purposes. However, in the metro cities, people are holding back their money waiting for the prices to go down," he said.

Among the jewellery, diamond is the most preferred with sales witnessing a 30 per cent growth during 2008 over the previous year.

"There is a steady growth witnessed in the diamond, especially in diamond jewelleries," said another leading jeweller.

Minawala said, in 2008 jewellery sector is one of the few sectors not to be affected by the global economic meltdown, which is unlikely to affect it in 2009 too.

Gold prices today marginally weakened due to strengthening dollar and were trading at Rs 13,450 per 10 grams in the domestic markets, while in the international markets gold was trading at USD 873 an ounce.