Lured by the correction in the prices of precious metals ahead of festive season, consumers booked a massive quantity of both gold and silver in forward contract both online and offline.
Financial Technologies-promoted National Spot Exchange Ltd (NSEL), India’s largest spot online trading firm, has recorded order influx if around 2 tonnes in gold and 25 tonnes in silver in the last one month. A majority of them of retail investors, these trades are deferred for immediately delivery.
“We have received requests from customers holding bullions in demat form for delivery on the day of ‘Dhanteras’ – a day prior to Diwali,” said Anjani Sinha, managing director of NSEL.
The order inflows, however, intensified from very small retail investors who accumulate their booking to make the quantity deliverable at the appropriate time, he added.
The minimum deliverable quantity of gold is fixed at 8 grams while for silver the same stands at 1 kg.
The exchange has received around 20,000 requests in the last one month from retail and individual traders in the last one month. This shows that investors are stepping ahead to take advantage of rupee’s volatility along with the decline in global prices that are holding bullion prices under check in India. The orders have been 75 higher than last year.
In India, owning a piece of precious metals on the day of Dhanterus symbolizes a harbinger of prosperity through the next year. Hence, everyone gets an intention to buy even a gram of gold or few grams of silver on this auspicious day.
“Perhaps, customers anticipate bullion prices to take a new high during Diwali. Hence, they book in advance for getting delivery on that day,” Sinha added.
With fresh bookings, total gold and silver holding with NSEL stood at 12 tonnes and 230 tonnes respectively.
The same trend percolated to the physical market also. Street jewellery retailers have also booked a massive quantity of gold and silver for delivery on the day of Dhanterus.
Pushpak Bullions, a city-based bullion dealer has increased around 20 increase in its sales last week. Further sales jumped similarly on Monday as retailers booked their targeted gold quantity in anticipation of higher prices.
“Customers take the current price as the safe bet looking at bullion’s behavour in the last few years. Hence, they are booking now for taking delivery on the day of Dhanterus,” said Ketan Shroff, Director, Pushpak Bullions.
Meanwhile, gold price fell 3.72 since September 12, the day on which the United States announced to launch third round of quantitative easing (QE3) as known as economic booster. Standard gold in Mumbai’s Zaveri Bazaar closed on Monday at Rs 30900 per 10 grams as compared to Rs 31200 per 10 grams the previous day.
The price decline was sharp in silver due to the lack of industrial activities globally. Since, the white precious metal is used largely for industrial purposes, the growth in industry drives its prices. Silver price recorded a decline of 5 since September 12 to close on Monday at Rs 60250 a kg as compared to Rs 63400 a kg on comparable date. On Monday, silver price fell from its level at Rs 31200 a kg the previous day.
In London, however, gold closed on Monday with a marginal loss of 0.46, after a wide fluctuation, to trade at $1713 an oz while silver was quoted at $31 an oz, a decline of 3.36 from the previous day.
