Mumbai/Hyderabad/Chennai, Nov. 3: The stores were crowded with shoppers, but the shine was a bit dull. High prices of gold seem to be putting off Indians from their favourite obsession, gold. The record high prices, which had recently crossed the `20,000 mark, have forced several customers to cut back on their purchases. Gold prices in the Mumbai bullion market softened marginally on Wednesday, which is also Dhanteras. This year, Dhanteras is spread over two days, starting at 5 pm on Wednesday and ending at 5 pm on Thursday.
In rupee value, gold prices have gone up almost 20 per cent over the past one year. Industry sources say that more than the high price of gold, it is the continuous fluctuations that put customers off.
Interestingly, while sales of gold jewellery have slowed down somewhat, the volume of gold being sold as investment has increased, say industry officials. Also, checks with dealers indicate that South India has done relatively better in terms of sales versus other regions.
“Demand for gold has increased by 20-30 per cent in the South,” says Mr Rajesh Mehta of Rajesh Exports.
“However, demand in West and North India is comparatively weaker,” he adds. Andhra Pradesh Gold, Silver Jewellery and Diamonds Merchants Association president, Mr Boorugu Surya Prakash Rao, told this publication that sales had been discouraging in the past three months, but are now picking up. “A majority of the people are investing in gold coins rather than jewellery,” he said. A number of other jewellers have observed this trend — people buying gold and silver coins instead of gold jewellery.
Chennai-based NAC’s chairman Mr NA Padmanabhan, says that over one-third of his gold sales have been in the form of coins, which are for investment. As of now, there are half a dozen gold ETFs in India, with total assets under management of about `2,400 crore.