Ahead of festive season, Gold sells at a premium

KOLKATA: Gold is selling at a premium of $1 per ounce in the domestic market with demand picking up ahead of the festive season.On Wednesday, the metal was available in the local market at Rupee30,950 per 10 gm, inclusive of the goods and services tax (GST).“There is an expectation in the market that gold will touch Rupee32,000 per 10 gm (without GST) by Diwali. So, people have started buying,” said Surendra Mehta, national secretary of India Bullion & Jewellers Association. Bullion traders and jewellers expect festive season demand to be 5-10per cent higher than last year’s despite prices moving up in the local market due to weakness in the rupee. Internationally, gold prices dropped by $98 per ounce since January 1, but Indians have not been able to take advantage of this due to a weak rupee which crossed the 70-mark against the dollar. Mukesh Kothari, director, RiddiSiddhi Bullions, said that premium on gold may rise as demand has started picking after the recently-concluded ‘India International Jewellery Show’, which attracted orders worth Rupee8,000 crore. Gold has lost its appeal as a safe-haven asset in the international market, having fallen over 7.5per cent so far this year, amid international trade disputes and the Turkish currency crisis, with investors increasingly turning to the US dollar instead.“In India, we might not see investment demand for gold in the upcoming festive season. It will only be jewellery sales. Overall, we are expecting a demand growth of 4-5per cent over last year,” said Joy Alukkas, chairman of Joyalukkas.The World Gold Council is positive about demand for the metal in India in the second half of 2018. “In India, gold premiums are positive again, showing a tilt towards buying. While there were devastating floods, expectations remain positive for H2 as consumers prepare for their traditional buying period,” the WGC said.

from The Economic Times https://ift.tt/2LJ5vyT