India Gold demand to surge by 70 per cent during festive season, say jewellers
Mumbai-India (Sept 1) Gold demand during the festive season of Dhanteras, Dusshera and Diwali will surge by up to 70 per cent despite a rise in price of the yellow metal, according to gold jewellers and traders. The price of gold is expected to go up by almost Rs.2,000 per 10 grams during the season.
“The festive season is approaching, a season where people give gold items as gifts to each other. So the demand of gold is expected to grow by 65 to 70 per cent till the end of November,” Shashank Goyal, founder of SLG Jewellers told The Hindu.
According to experts, the price of gold is expected to increase to Rs.28,500 per 10 grams by the end of October. It stands at Around Rs.26,700 at the moment. “Gold prices will rise, but not like earlier where the change in price was very sharp. The rise in price will be more stable. There is no single reason for the rise in the price of gold — the rupee-dollar exchange rate, demand-supply market mechanics, and some manipulation,” said Chitwn D. Malhotra, founder of the Dillano Luxurious Jewels.
“Last year, the demand for gold in the first half of the year was not so good, but in the festive season the demand of gold rose to 35 per cent due to the declining price trend. Demand this year is set to grow at twice that rate,” Mr. Goyal said.
So far, the gold demand situation in India has been subdued. “Comparing the first half of 2015 to the first half of 2014, Indian jewellery demand fell just 3 per cent. But the decline was more dramatic, when we look at the second quarter. The 23 per cent year-on-year fall in Q2 jewellery demand can largely be traced to the unseasonal rainfall that damaged crops in Q1 and the consequent impact on incomes among the all-important rural population,” the World Gold Council said in its latest report.
The demand for gold in the second quarter of calendar year 2015 stood at 154.5 tonnes, amounting to $5.9 billion. This is far lower in tonnage and cost than the levels in the second quarter of the previous year, when gold demand was 205 tonnes or $8.5 billion. However, if the experts are correct, gold demand during the festive season could surge to 263 tonnes.