 "Jewellers expect Diwali gold demand to resume as price turn attractive")
The price of gold price fell to a one–month low on Friday, ahead of the most auspicious purchase season of the year, Diwali.
Standard gold fell to Rs 26,100 per 10g at the popular Zaveri Bazaar here, a decline of 3.5 per cent in two weeks from Rs 27,100 per 10g.
“Consumers should buy at least 60-70 per cent of their annual purchase allocation. It seems prudent to now make some investment in gold,” said Rajesh Mehta, managing director of Rajesh Exports, one of the largest gold jewellery producers and traders.
The price was volatile in the past month, with a downside bias; so, consumers abstained from fresh purchase. Now, they’re coming back. Ashok Minawala, director of the All India Gems and Jewellery Trade Federation, sees a 20 per cent jump in sales in the past week.
“At Rs 26,000–26,500 per 10g, gold is a good buy. Propensity of a rise is larger than a fall,” said Kumar Jain, director, Umedmal Tilokchand Zaveri, a bullion dealer and jewellery retailer here.
Analysts also forecast a sharp decline in global gold prices after an announcement for a rise in US interest rates in December. This is set to strengthen the dollar, resulting in pressure on other asset classes, including gold and silver. “The price in global markets might come down to $1,045 an oz and even lower,” said Gnanasekar Thiagarajan, director, Commtrendz Research.
He believes rate increases by the Fed might help depreciate the rupee against the dollar, resulting in gold moving in a Rs 24,500–27,000 per 10 g range by next month. Silver has not been affected as much. Its price could fall to Rs 32,000–33,000 a kg.
