Soaring gold prices along with bad monsoon don’t augur well for the yellow metal demand ahead of the festive season when the jewellers start storing gold to further sell in October and November, according to analysts.
Soaring gold prices along with bad monsoon don’t augur well for the yellow metal demand ahead of the festive season when the jewellers start storing gold to further sell in October and November, according to analysts. The gold prices eased on Wednesday and touched nearly the level of $1,500 level an ounce as investors turned cautious ahead of minutes from the US Federal Reserve’s last meeting, which may indicate further about the interest rate cuts in the next policy. Spot gold was down 0.4% at $1,500.80 per ounce as of 1101 GMT, while the US gold futures slipped 0.3% to $1,511.40, according to Reuters.
With the recent imposition of hiked import duty on gold by the Finance Minister Nirmala Sitharaman in her maiden budget to floods in some areas of the country would hamper the rural demand during the festive season, the analysts told. People in rural areas. Global gold prices this month hit a six-year high above a level of $1,500 ounce. The gold imports fell more than 40 per cent to $1.7 billion.
“Jewellers are saying that every year they store gold during this time to sell in October and November and December, but this time prices are very high so they are waiting for the prices to come down to purchase for the festive season. Moreover, even after giving discounts, there is hardly any consumer for gold. Comex gold prices in the last two months have surged by $175 per kg. Yuan devaluation, domestic concerns and depreciation in the rupee has also led to lower demand for gold, Jigar Trivedi, Fundamental Analyst – Commodities told Financial Express Online.
Global prices this month traded at a six-year high of more than $1,500 a troy ounce, and some local prices have been at record levels. In value terms, gold imports fell 42 per cent in July from a year earlier.