Bullion traders expect brisk sales of gold this Akshaya Tritiya tomorrow, a day considered auspicious for people to buy the yellow metal. However, gold prices are higher by 33 per cent, compared to last year, a factor that could limit sales this time.
Earlier, gold sales had taken a hit due to a three-week strike by jewellers post-Budget this year.
According to industry estimates, in the last three years, gold sales on the day of Akshaya Tritiya used to be 8-10 tonnes, including sales through exchange traded funds (ETFs).
Rajiv Popley, director, Popley Jewels, said, “This time, too, sales are expected to be normal, as high prices of gold year after year actually gives buyers confidence that their decision to buy gold has proved auspicious for them.”
| DAZZLING RETURNS | ||||
| Standard Gold Rs/10 gm | % chg over previous Akshaya Tritiya | Rupee/ dollar | London Gold $/ounce | |
| Apr 20, ’07 | 9,370 | -1.99 | 41.77 | 692 |
| May 07, ’08 | 11,655 | 24.39 | 41.35 | 869 |
| Apr 27, ’09 | 14,830 | 27.24 | 50.26 | 907 |
| May 15, ’10 | 18,215 | 22.83 | 45.21 | 1,233 |
| May 06, ’11 | 21,685 | 19.05 | 44.80 | 1,496 |
| Apr 21, ’12 | 28,635 | 32.05 | 52.53 | 1,643 |
| Source: Bloomberg, Bombay Bullion Association Compiled by BS Research Bureau | ||||
Compared to last year, 20 per cent of demand for gold has moved from the physical market to the stock exchange platform, in the form of ETFs. In fact, this year, ETFs are expected to notch up higher sales than of physical gold. At the National Spot Exchange, a sort of electronic spot market, demand for gold last Akshaya Tritiya was 1.67 tonnes. So, taking into account sales through ETFs and sales on the spot exchange, over a third of the demand has already shifted to the electronic platform, where gold is sold in demat form to investors.
Several customers have not been able to buy gold in the past few weeks, due to a nationwide strike by jewellers opposing imposition of excise duty on gold jewellery and other tax increases by the government. “These customers are now expected to come back to the market tomorrow,” said Bhargav Vaidya, bullion analyst, who has been tracking the market for the last two decades. He expects five tonnes of gold to be traded tomorrow in the physical form. He believes deliveries may be even higher, as many customers book gold when prices are low but lift delivery on this auspicious day.
According to market sources, in the last couple of weeks, post-withdrawal of the strike, 10 tonnes of net gold imports are understood to have taken place. Banks that were holding gold purchased earlier, managed to sell 15 tonnes of the yellow metal. In fact, this demand helped them get rid of the stocks they were holding.
