Festive frenzy: Gold prices shoot on rapid sales

Written by FE Online | New Delhi | Updated: Oct 22 2014, 15:01pm hrs
Gold coinsGold prices surged in Delhi as buyers thronged jewellery shops to buy the yellow metal on the occasion of Dhanteras festival. (Reuters)
Gold prices surged by Rs 150 per 10 gram to Rs 27,925 in Delhi on Tuesday as buyers thronged jewellery shops to buy the yellow metal on the occasion of Dhanteras festival. Silver also moved up by Rs 150 to Rs 39,000 per kg on increased buying by industrial units and coin makers.

* MMTC (Metals and Minerals Trading Corporation of India) said that it has sold its entire stock of gold and silver coins.

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* 1.5 lakh pieces of silver coins and 25,000 pieces (1.5 tonnes) of gold coins were minted by MMTC for sale during Diwali, with the total sales on Tuesday up by 40 per cent year-on-year.

* 30% increase in sales expected by traders on brisk buying during the festive season.

* 92 tonnes of gold were imported last month to meet the Diwali demand.

* 450 % YoY increase in import of the yellow metal in September at $3.8 billion.

* The sales are up due to lower level of gold price this year compared to Rs 31,400 per 10 gram.

- Silver coins remained steady at Rs 69,000 for buying and

- Rs 70,000 for selling of 100 pieces on festive season demand.

- Trade deficit worsened to an 18-month high of $14 billion in September following the surge in gold imports.

* Rising gold imports pose a huge challenge to current account deficit (CAD), which had shot up to 4.7 % of GDP in 2012-13. In order to curb the CAD, the government had in August 2013 imposed quantitative restrictions. It also increased import duty on the yellow metal in phases, which now stands at 10 per cent as against Rs 300 per 10 grams in January 2012.