Slide in the rupee and the current volatility in the economy has not dampened the purchase of gold on Dussehra, market sources say.
"Gold continues to be a safe haven for investors, especially when they are rapidly withdrawing money from equity, bonds and Non Banking Finance Companies," Surendra Mehta, national secretary of Indian Bullion & Jewellers Association (IBJA) told DNA. "The price in the international market on Thursday was reported at Rs 31,700 per 10 gm (excluding GST) and it will remain in the range of Rs 32,700 to Rs 33,000 per 10 gm till Diwali."
There is likely to be a 5 per cent dip in the gold import to 830 ton from January to December 2018 compared to 880 ton for the corresponding period last year, he says. This is due to depreciation of rupee and states affected by natural calamities.
In Mumbai and Mumbai Metropolitan Region, city jewellers have estimated at least 15 per cent rise in the buying of the shiny metal against 30 per cent fall last year. This is despite price rising to Rs 32,750 per 10 gm (including GST) from last year's Rs 29,570 per 10 gm.
The purchase of yellow metal is also set to witness 20 per cent surge in the southern region, and 15 per cent rise in northern and western Regions and 5 per cent in the eastern region.
In Jaipur too, people have been flocking to jewellers. "The gold rate has begun to rise and people are confused whether it will rise or drop. Also wedding season is around the corner," says Kailash Mittal from the Sarafa Traders Committee.
Kumar Jain, vice president of Shri Mumbai Jewellers Association, said investors see gold as safe bet, especially given the blood bath in the stock market and slump in the realty sector. "Gold purchase will continue on Friday as Dusherra is celebrated for two days," he said. "Although the rapidly falling rupee is a matter of worry, consumers are coming forward to purchase gold as a long term investment. This year, the marriage season will continue till July 2019."
Mehta said the rise in gold purchase is also an opportunity for consumer to make a fortune by selling jewellery and gold. Jewellers too make money in buying back gold from consumers. "Annually, 300 ton of gold is recycled across the country," he said.
Leading gold analyst Bhargav Vaidya projected no major change in gold domestic prices from now to Diwali; they will remain in the range of Rs 32,000 per 10 grm.
Coimbatore Jewellery Manufacturers' Association president Muthu Venkatraman argued that the government has been requested to reduce GST on gold to 1.25 per cent from 3 per cent, which will provide a relief to the consumer and increase tax compliance. "The Association has appealed to the government to bring down import duty on gold to 2 per cent from 10 per cent, which will help dip in the gold prices by Rs 200 per gram. It will also curb the parallel economy," he added.
