Gold sales have declined sharply despite the approaching Christmas and ongoing wedding season mainly because of volatility in prices of the yellow metal, market players said. But jewellers are hopeful that demand may recover in a couple of days.
“It is not the terror attack anymore that has damaged buying sentiment in gold, it is more because of price volatility in the yellow metal,” said Naresh Solanki, owner of the Mumbai-based Shri Manibhadra Jewellers.
Gold prices were slightly above Rs 13,000 last weak.
At 12:30 pm, February contract of gold on MCX was at Rs 12,856 per 10 gm, up 0.93 per cent from Saturday’s close.
Gold demand has dropped significantly by about 50 per cent this season compared with same period last year, said most traders.
“Demand for gold is not good at all. It is just not picking up. Sales have fallen nearly 50 per cent compared with last year,” said Deepak Zaveri, owner of Dhirajlal Bhimji Zaveri Jewellers.
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However, some jewellers are hopeful that demand may revive in a couple of days as gold prices have edged down over Rs 110 since Saturday.
“We expect sales to pick up from tomorrow (Tuesday) mainly for jewellery buying than investment since the marriage season is currently on,” said a sales executive of Mumbai-based Mohanraj Jewellers.
Compulsory buying has to come in now. Investment buying may be delayed since people would choose to wait for some time in anticipation of lower gold prices in coming sessions, he said.
However, most traders and jewellers in south of India, who had complained of poor gold sales in December, are not hopeful of its revival in the coming days.
“Usually NRIs (non-resident Indians) flock to the country during this season and gold sales touch new peaks. But this time there have been a few visitors to the country as people are fearing job loss amid global financial turmoil,” said Ananth Padmanaban, owner of Chennai-based NAC Jewellers.
India’s gold buying picks up with Diwali in October, and usually peak in the final quarter of the year.
The country is the world’s largest gold buyer and annually imports nearly 700 tonnes of yellow metal.
“So far this month, India has imported a paltry 1.5-2 tonnes of gold. India’s gold imports were down last month (November) also,” said Suresh Hundia, president, Bombay Bullion Association.