Gold prices have risen past the Rs 32,000 per 10-gram mark since the last week of October, while jewellery demand remained muted even with the ongoing festive season.
Gold buying on Dhanteras has always been considered as auspicious in India, mostly in the northern and western states of the country. However, gold demand remained sluggish today after the recent surge in the yellow metal prices. Gold prices have risen past the Rs 32,000 per 10-gram mark since the last week of October, while jewellery demand remained muted even with the ongoing festive season. Internationally, gold prices have eased. So, is it the right time to invest in the yellow metal?
Gold prices recently surged to a 6-year high of Rs 32,625 per 10 gram in the last week of October, but this was not due to jewellery demand, said Jigar Trivedi, Fundamental Research Analyst — Commodities, Anand Rathi Group. “For the entire year, gold prices have remained above Rs 30,000 per 10 gram. Only in August and September, when the prices came down below the psychological level, jewellery demand changed,” Trivedi told FE Online.
Trivedi suggested to wait for a month and then go on long positions on investment in gold. “It’s good to hold 5% of the total investment into gold. Once the bottom is ascertained in gold prices, the investment proportion in gold can be increased,” he added.
Gold and jewellery sales remained subdued in the morning trade today owing to sluggish demand from consumers amid high prices, said a PTI report. Despite that, organised jewellery players like P C Jewellers are expecting better sales later during the day, hoping to attract more footfalls with quality and better designs at competitive prices. Gold prices are ruling at Rs 32,690 per 10 grams today in the national capital. It was trading at Rs 30,710 per 10 grams on the Dhanteras day in 2017.
“Footfalls are good but sales are moderate so far. Till few days back, we were thinking gold demand on the day of Dhanteras would be down 10-15%, but looking at the pre-booking and footfalls, there should be least 5-7% jump in sales today,” PTI reported quoting the All India Gems and Jewellery Trade Federation (GJF) Chairman Nitin Khandelwal.
On the other hand, Vidit Garg, Director, Kundan Group said that on the occasion, since people buy smaller amounts of the precious metal, it does not make much of a difference in the overall investment in gold. “In the overall scenario, gold prices will be around Rs 30,000, plus or minus Rs 1,000. Because people are buying only 5 gm or 10 gm (on Dhanteras) so that does not make much difference on investment. They are much attached to buying gold than to see prices,” Garg told FE Online.