Standard gold rose 1.2 per cent at Zaveri Bazar here on Wednesday, despite a decline in global prices. Rupee depreciation kept gold buyers away from the benefit of global price fall.
The gold price shot up by Rs 330 to close the day at Rs 28,165 per 10g from Rs 27,835 per 10g yesterday, while the precious metal plunged $7.5 in London to trade currently at $1,827, as compared to $1833.60 an oz yesterday.
Similarly, the metal rose 1.75 per cent, or Rs 1,120, to close in Mumbai at Rs 65,180 per kg, as compared to Rs 64,060 per kg the previous day. In London, though the metal was trading at $40.92 an oz, a marginal decline from previous day’s close at $40.98 an oz yesterday.
“Gold’s inverse movement in the domestic market is purely driven by rupee depreciation,” said Gnanasekar Thiagarajan, director, Commtrendz Research, a Mumbai-based commodity broking firm.
Gold rose at a marginal 0.1 per cent this week in terms of the rupee, while in terms of the dollar its price fell 1.55 per cent. The rupee continued its depreciating move and closed at 47.65 against the dollar on Wednesday, down from the level of 46.57 on Monday and a marginal fall of 0.05 paise from the previous close at 47.60.
Meanwhile, jewellers like Lagu Bandhu have crafted a wide range of ready and custom-made designs in precious metals and gemstones. The authenticity of these is certified by gemological laboratories. The company has announced a gemstone festival called Ratnotsav on September 13-22, to boost jewellery sales, where it offers a 10 per cent discount on all purchases.
Many jewellers in the city, however, have discovered a new jewellery buying trend, a mix of precious metals with other cost-effective metals to beat prices. Jewellers have also introduced writing instruments like pens crafted with silver on the top to lure customers. These articles are set for display in the upcoming Gift India 2011 and Stationery Asia 2011 in Mumbai on September 16-19.
Jewellers have already started anticipating lower sales in the upcoming festive season.
“Gold prices retraced from the higher levels on Wednesday along with the equity markets after the Moody’s downgrade of two of the top French banks Societe Generale and Credit Agricole. This created the jitters that the euro zone can further come under the banking crisis. This did not come as a surprise as investors were already expecting this to happen. Gold was also pressurised by the squaring off of long position by the investors to meet the margin calls for the equities market,” said Basant Vaid, senior research analyst with the broking firm Bonanza Portfolio.
On the technical front looks vulnerable for correction after touching the resistance level of Rs 28,500 in the Indian market. Technical indicators are hovering in the overbought region since long and this can motivate some investors to build short and cover long positions in the market. In short term gold process can once slop towards Rs 28,000 per 10g level from where some fresh buying can be seen on the back of strong fundamentals, he added.
