Spot gold price in Indian market dropped by 0.5 per cent in morning trade to Rs 37,521 per 10 gram raising hope among bullion dealers and jewellers of a gradual spike in demand in run up to the festive season. The trade was expecting a rise in price following US Federal Reserve's decision to cut interest rate, but the lack of clarity in the Fed's monetary policy outlook kept investors cautious.
Ketan Shroff, managing director, Penta Gold Bullion said "This week I am noticing a slight movement in bullion sales which indicates that market is sensing some demand in the coming weeks. If price stabilises at Rs 35,500 - Rs 36000 per 10 gm level then there will be good demand in the market."
"But if the US makes any comments on Iran and Saudi Arabia or if the US-China trade war escalates then prices will further shoot up dampening the festive sales," he added. TS Kalyanaraman, chairman and managing director, Kalyan Jewellers said that rise in gold prices has had an impact the consumer sentiments and gold buying trends. "But we believe that these sentiments are short-term and we are expecting the demand to pick up soon," he added.
Usually, when there is an upward movement of gold prices, we witness customer response in two distinct ways. There is a set of customers who purchase, because they think that the prices will go up even more or because there is a wedding in the family. There is also another set of customers who wait for the prices to come down before making their purchases. So in that sense, while the bigger ticket wedding purchases continue, the smaller more casual buying is put on hold.
The Kalyan Jewellers CMD also added that customers are availing benefits from rising gold price by selling or exchanging their old gold jewellery. "Naturally, the old gold exchange and sale has picked up and customers are able to get more value on their old jewellery than what they had earlier imagined,” he said.
Courtesy - Economic Times