Kolkata: The rush for gold is likely to continue post Diwali as the yellow metal is expected to open on a weak note in the domestic market on Wednesday following a 5.5% drop in international spot prices, the steepest since August 2020.
“Prices are likely to correct to ₹1.22-1.23 lakh per 10 gm tomorrow (on Wednesday) when the Indian gold market opens. If prices remain at this level, then the demand upswing that we had noticed during Dhanteras will continue. It is good for consumers who have weddings in their families as a correction in prices means lesser pressure on the pockets,” said Surendra Mehta, national secretary of India Bullion & Jewellers Association (IBJA).
Gold market was closed on Tuesday on account of Diwali.
Gold prices had fallen on Tuesday, as the dollar rose and investors booked profits after expectations of US interest rate cuts and sustained safe-haven demand drove the yellow metal to a fresh record high in the previous session. Spot gold was down 5.5% to a one-week low of $4,115.83 per ounce.
On Monday, gold at the retail market was trading at ₹1,27,633 per 10 gm. With a GST of 3%, gold was available at a price of ₹1,31,461 per 10 gm at the retail end. Gold price had corrected on Monday from a high of ₹1.34 lakh per 10 gm (with GST) on Dhanteras, which this year continued for two days -October 18 and 19.
There has been healthy demand for gold this festive season. The record rally in gold has drawn investor attention and fuelled sustained interest in physical gold. As a result, the share of investment demand within overall domestic gold consumption is on the rise.
“Despite pressure on gold jewellery consumption due to high prices and affordability, there has been a recent sales uptick, predominantly concentrated around wedding-related purchases and aligning with the wedding season,” said Kavita Chacko, research head (India), World Gold Council.
Rajesh Rokde, chairman of All India Gem & Jewellery Domestic Council, said the mood has been positive among consumers this Dhanteras with all categories of jewellery witnessing strong demand.
“In terms of volume, sales were on par with last year, but in value terms, we’ve seen a remarkable growth of 35-40%. With Bhai Duj this week, we expect this momentum to continue,” he added.
