Dhanteras expected to see 50% less gold sales as prices spike up

Gold may lose its glitter this Dhanteras as a sharp rise in prices of yellow metal has weakened its demand in domestic market, according to experts. "On Dhanteras, gold sales touch around 40 tonnes every year. However, weak demand may decrease sales by 50% this year," Surendra Mehta, National Secretary, India Bullion and Jewellers Association (IBJA) told IANS.

Gold imports sedived

Gold imports have also sedived due to higher prices and an increase in import duty, Mehta ded. India imported only 26 tonnes of gold in September this year, down from 81.71 tonnes a year ago. imports fell 68.18%, as compared to last year. Market experts believe that gold imports have plunged to a multi-year low after Central government increased import duty on precious metals from 10% to 12.5% in Union Budget in July this year.

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"re are three s of gold demand — wedding demand, festive season demand and regular demand. regular demand is alrey low due to liquidity crisis in market. Besides, buyers are avoiding to invest in gold much an account of higher prices," Mehta said. "Moreover, gold demand will continue to remain low this festive season," he ded.

Ar market analyst pointed out that ar reason for weakened domestic demand last month is that prices in global market have risen. " gold prices in domestic market follow trend in international market. However, recent fall in prices may improve festive season demand," said Ajay Kedia, Director, Kedia visory.

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However, bullion market may lose its sheen this festive season due to ecomic slowdown in country, Kedia ded. In Mumbai, 22-carat gold was tring at ₹39,190 per 10 gram and 24-carat gold rose to ₹39,340 per 10 gram on Friday. Gold prices have touched ₹40,000 level many times in past few months.

On Monday, gold fell ₹38 to ₹39,295 per 10 grams on Multi-Commodity Exchange (MCX), whereas on 5 October last year, gold prices on MCX were at ₹31,154. In international market on Monday, gold prices rose over $250 per ounce to $1,500 per ounce as compared to last year. It was tring at $1,242.20 per ounce on 5 October 2018.

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