After robust sales on the occasion of Akshaya Tritiya yesterday, bullion dealers cut gold and silver prices to below the cost of import, albeit marginally, at Zaveri Bazar here on Wednesday. The purpose was to lure customers, who generally abstain from fresh purchase, a day after festival buying.
While the discount in gold was a mere Rs 50 per 10g, the offer itself was sufficient to increase footfalls in retail stores. The discount in silver was in the range of Rs 400-500 a kg.
On Wednesday, standard gold was quoted in Mumbai at Rs 28,820 per 10g, a decline of Rs 65 from the previous day’s quote of Rs 28,885 per 10g. Silver, too, declined by Rs 255 to trade at Rs 56,495 a kg on Wednesday, compared to Rs 56,750 a kg yesterday. Stockists and bulk retailers were offering further discounts to spot buyers.
“Generally, the business sentiment declines a day after festivals. But, jewellers use various means to lure customers,” said Suresh Hundia, ex-president of the Bombay Bullion Association (BBA) and proprietor of Hundia Exports, one of the largest importers of silver in India.
However, a majority of bullion dealers witnessed hardly 25 per cent of their average daily sales on Wednesday.
“Those who wanted to buy, had bought on the auspicious day. Now, only need-based buying will happen. Hence, for a couple of days, the weakening sentiment is likely to continue,” said Hundia.
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The price decline in precious metals was largely attributed to similar sentiment in the global markets, coupled with an appreciation in the rupee against the dollar. The yellow metal price fell marginally on Wednesday in the London spot market to $1,640.32 an ounce, from $1,642.27 an ounce yesterday. Silver also fell marginally from $30.91 to $30.84 an ounce.
The rupee played a major role in the price decline. The Indian currency appreciated marginally to close on Wednesday at 52.55 against the greenback, from 52.70 on Tuesday.
According to Lalit Jagawat, director of BBA and proprietor of Nakoda Bullion, a city-based dealer, “The next buying sentiment will resume in the first week of May. Till then, the trend would remain weak.”
While gold sales were reported 10-15 per cent up on the occasion of Akshaya Tritiya to around 17 tonnes, consumers’ sentiment towards silver remained weak on poor returns in the white precious metal. Gold and silver gave 32 per cent and five per cent returns in the past year, respectively.