new Delhi. Due to the recent record increase in the rate of gold, the buyers of gold in India have been put in trouble. Those who were looking to buy gold have given up their intention to buy. Due to all this, the work of jewelers across the country has reduced considerably and they are worried. Benchmark gold futures in India are down nearly 7% since hitting a high of ₹55,558 ($725) per 10 grams last week, lower than the record hit in August 2020. On Tuesday, gold was trading at Rs 51,508 at 6:23 pm Indian time.
Prices in India, the world’s largest consumer market after China, have risen in line with foreign markets last month. After Russia’s invasion of Ukraine, investors consider gold better as a safe investment option. He took out money from the stock markets around the world and invested in safe-haven means gold. Our country imports almost all the bullion, which it consumes. As the Indian currency is trading at record low levels, the cost of imports is increasing.
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Slowdown in demand for gold
Tanya Rastogi, director of Lucknow-based Lala Jugal Kishore Jewellers, said, “Buyers have become very cautious about price volatility and are waiting for the price to settle down.” He said that the rise in gold in the last two weeks has affected the purchase of wedding related jewelery and this has also reduced the demand for investment. There is a slowdown in it.
Rastogi said that with buyers making constant calls to check daily prices, many are asking whether the current downtrend will continue or if there will be an upward trend again. However, the precious metal remains the “go-to safe haven asset” and it is likely that consumers will return on Akshaya Tritiya amid geopolitical and inflationary concerns. Akshaya Tritiya is considered an auspicious day by Hindus to buy gold. The festival is in May this year.
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Customers waiting for prices to stabilize
Jewelery demand comprises the bulk of gold consumption in India and the recent decline in purchases is different from the global situation, where buyers have started hoarding coins and bars. With the fear of the epidemic subsiding, sales in the country were now recovering after the last two years. According to the World Gold Council, India’s gold imports hit a decade-high level in 2021 as jewelery purchases nearly doubled.
Ashish Pethe, Chairman, All India Gem and Jewelery Domestic Council said, “Demand for jewelery was good in the first two months of 2022, but March has been slow due to volatility in prices. People are staying away and waiting.” Stable prices are the best thing for demand and that is what people are waiting for.
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wedding season affected
Ahmed M.P., chairman of Kerala-based Malabar Gold and Diamonds. The company had said last week that higher prices had hurt the demand for gold jewelery during the wedding season. While a section of buyers does not seem much affected by this hike and stick to their pre-determined plans. Many families with limited budget are adjusting their expenditure instead of postponing the wedding.”
Tags: gold business, Gold investment
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