Liquidity crunch has taken its toll on gold buying on the auspicious day of Pushya Nakshatra on Wednesday. very high price and sentiment favouring cash has resulted in a 50 per cent fall in demand for gold compared to last year.
International gold prices have turned volatile and despite gold being seen as a safe heaven, prices don’t sustain at higher level and generating cash from selling whatever is available has lead to a further fall in gold prices. Just couple of week ago, the price of gold in the world market crossed $900 per ounce mark and in India gold reached at Rs 14,000 per 10 gm, an all time high rate.
Rather than buy gold on the occasion of Pushya Nakshatra, people sell their gold investments and jewellery to generate cash.
Gold prices have fallen from the high of Rs 14,000 to Rs 12,600-12,700 per 10 gm, but it is still higher compared to last year’s price of Rs 10,150-10,300 on the Pushya Nakshatra day last year. There is an expectation of a further fall in gold prices and hence buying is not coming.
In Mumbai market, gold was quoted at Rs 12,155 down Rs 355 from yesterday’s close.
“People believe that gold price is high so there is no buying related to Pushya Nakshatra. Only 25 per cent buying being seen for Pushya Nakshatra. Gold rate came down from Rs 14,000 level to Rs 12,8000 per 10 gm. It still is being seen as too high a rate as gold was Rs 11,400-11,500 a month ago. If gold price falls below Rs 12,000 mark, there is hope that buyers will return on ‘Dhan Teras’,” said Balvantbhai Badani, president, Rajkot Gold Dealers Association.
He said, “You can see the impact of money crisis on both jewellers and buyers. At present, only gold can give better returns.”
Manoj Soni of AB Jewels, Ahmedabad said, “Gold price has come down, but investors are waiting and watching. People want to buy but they are also waiting for one big fall.”