Buyers show no interest on gold jewelry
Posted on: 10/Feb/2016 5:42:53 PM
Indian gold sellers who usually sell the yellow metal at a premium as compared to London prices are now offering a historic low rates of gold of up to $25 an ounce. In spite of record discounts in gold rates, there are now enough buyers attracted towards gold trade. The reason for this is that customers expect fall of gold rates following union budget this month.
There is an expectation by the bullion industry that a 10 percent cut down on import duty on gold is likely during the annual budget for 2016-17. This will be presented on 29th February. This reduction will increase supply and bring about a fall in domestic prices.
During the previous budget when no such cut down on duty was made on the metal, there was discount in gold price too. To note, India stands second as the biggest gold consumer.
The director of MNC Bullion, Daman Prakash Rathod, a wholesaler based in Chennai says there are very meager transactions at present. There are tremendous discounts offered by dealers; however buyers don`t seem to show enough interest.
This is a time when Chinese buyers are not present owing to lunar new year holidays. As the demand is low at such a time, it cannot limit a rally in global price which reached up to $1,200 for the very first time since June.
The wedding season will be on until May. This will very much increase the gold demand. Many have postponed their gold purchasing plan with an anticipation of price fall later. Gold purchase has largely got reduced in the recent days in otherwise busy centers like Zaveri bazaar, Mumbai.
Kumar Jain of the bazaar said he cannot even sell a small jewelry piece in such biggest bullion market of the entire country. There are not even any inquiry about gold, he adds.
Gold rate was at peak during August 2014 o Monday when the rate was Rs 28,527 for ten grams of gold. This got lower than RS 25,000 per ten grams last month.
