Gold Exceeded Expectations in India


Indian gold jewelry purchases failed to rise Monday even as it was one of the most positive days to buy the yellow metal, because of the rupee getting weak and a recent drop in prices weighed on demand.

Most of the retailers and analysts believed that sales are expected to upsurge by no more than 10%-15% from a year earlier, as prices have improved by 8% since gold dropped to a two-year low in mid-April. Even though a lot of consumers had purchased greatly when prices fell, sales in financial hub Mumbai could rush as shops reopen after a week-long protest against the obligation of a local tax on retail sales.

Gold sales commonly increase by 40%-50% during the Akshaya Trithiya festival, but Indian gold prices were estimated exceeding Rs. 27,000 ($492) per 10 grams on Monday, up from Rs. 25,000 in mid-April. The rupee’s decrease to a one-month low against the USD on Monday did not help any way.

Stated by B Girirajan, president of All Kerala Gold and Silver Merchants Association, “People may make token purchases on this auspicious day,” when buying a piece of gold is believed to bring good luck to new ventures.

Gold demand of exchange traded funds, or paper gold, will expected to increase 65% on Monday to around 10 billion rupees, stated by Sugandha Sachdeva, an analyst at Religare Securities.

Even though a rising number of urban consumers are swapping to the product, which is easier to save than physical gold, paper gold accounts for merely around 1.5% of India’s annual gold demand of about 950 metric tons. Jewelry takes the lion’s share of around 65% of sales.

Sales in the city on Monday possibly will increase by about 30% from a year earlier to 4 tons, as stated by Bombay Bullion Association President Mohit Khamboj.