Price of 22 carat gold rose to $517, while that 24 carat gold to $542 on Thursday in Delhi, up by $8.43 from Wednesday's price
Gold prices shot up by $8.43 per 10 gm in India on Thursday, triggering fears of another round of spurt in gold prices and dashing the hopes of jewellery retailers across various states of a recovery in sales during the on-going festive season in India.
Indian currency, rupee also lost 14 paisa in the opening trading hours against the US dollar, which will further push up the landed price of gold, commodity and jewellery traders said.
“The combined effect of Thursday’s increase in gold price and weakening of rupee could be an increase of $0.84 per gm of gold in the Indian market,” Surendra Mehta, National Secretary, Indian Bullion & Jewellers Association (IBJA), told Arabian Business.
“The increase in gold in the middle of the on-going Dussehra festival and beginning of the marriage season in many parts of India will dash the hopes of any recovery in gold jewellery sales during the festive season,” Mehta said.
Price of 22 carat gold rose to $517, while that 24 carat gold to $542 on Thursday in Delhi, a jump of $8.43 from the previous day’s level.
Mehta said gold jewellery sales, which were down by about 25 percent in the initial days of the current festive season compared to last year’s sales, could see further plunge due to the sudden spurt in gold prices.
Gold prices jumped 1.1 percent to $1,547.70 per ounce on Wednesday in the international market, reacting to the weak manufacturing data from the US, raising fears of an economic downturn.
Uncertainties over China-US trade ties and Brexit further boosted bullion’s safe-haven appeal, industry analysts said.
Gold jewellery retailers said they do not anticipate any pickup in sales during the current festive and marriage season, if gold prices do not come down significantly in the coming days.
“Though gold jewellery sales have been on a downward spiral in the last few months due to the consistent rise in gold prices, we were hopeful of a not big drop in sales in the current festive season compared to last year,” a manager at Bhima & Sons, a leading Kerala-based jewellery retail chain, told Arabian Business.
“This was because gold prices were settling at $500-$510 per 10 gm in the beginning of the season from the over $561 per 10 gm level few weeks ago, giving a sense of comfort to buyers,” the manager, who wished not to be identified, said.
Jewellery traders said even for marriages, they have observed trend of customers exchanging their old jewellery for new ones because of the prevailing high gold prices.