Notwithstanding slowdown in gold sales even during the auspicious occasion of Akshaya Tritiya, small investors have been increasingly shifting their focus towards gold as an investment option during the last one year.
The Multi Commodity Exchange (MCX) which launched its first ever gold guinea futures contract a year back has already sold 44,125 guineas (8 gram each). More than 352 kg of gold has been purchase by small investors through buying of these guineas.
“Small retail investors have been specially showing interest in the product because of ‘physical delivery’ and quality certification from London Bullion Market,” Ashok Mittal, vice-president, Karvy Comtrade, told FE. Investors have taken delivery of 715 gold guineas from Karvy during the April 2009.
Another factors going in favour of gold guinea is that eight gram gold guinea are not only being physically delivered at home but also sold at around 15% less than the market price of gold coin sold by financial institutions and banks.
The guinea prices have moved from Rs 9,661 per 8 gram on May 8, 2008 to Rs 11,370 for the April 2009 contract, a rise of more than 15%. MCX has set up delivery centres at Ahmedabad, Delhi, Mumbai, Hyderabad, Chennai, Bangalore and Kolkata, for physical delivery of gold guinea.
Gold saw highest volume at the MCX out of the 27 commodities traded in the exchange. The total value of gold trade in MCX was Rs 83,503 crore during the period, an FMC data showed.
However jewellers hoping to cash on Akshaya Tritiya were disappointed as sales of yellow metal went down significantly. Gold buying was estimated to be down nearly 20% across the country compared to last year as the prices were quite high and the economic downturn had restricted spending on gold.