Gold retailers, on Monday, reported brisk sales as there was demand for the yellow metal after the recent fall in prices.
Monday also marked the occasion of Akshaya Tritiya, a Hindu festival that is considered an auspicious time to buy gold.
While it was too early for indicative volumes, gold retailers felt sales were as good, if not better, than last year.
Several retailers and banks have been pushing gold coin and bar sales on the occasion, but “this time, purchases are more inclined towards jewellery and not just the usual coins,” said Ashok Minawala, partner, Danabhai Jewellers.
“The ticket size is also larger, and the price decline is a major factor,” he added. Mr. Minawala said the gold price remaining subdued was surprising, “as it normally shoots up on festive days.”
Vinod Hayagriv, Managing Director, C. Krishniah Chetty & Sons, felt retail sales could be at last year’s level. “There have been high purchases over the last month, given the fall in prices and taking that into consideration, sales momentum was somewhat maintained,” he said.
On the multi-commodity exchange, gold was trading down at Rs. 26,760 per 10 gram. On the same occasion last year, gold was trading at Rs. 29,100 per 10 gram. Gold prices have recently declined almost 30 per cent from their highs on the back of an international decline.
“Despite it being Akshaya Tritiya, gold declined in the domestic market in tandem with the moves in the overseas market,” said C.P.Krishnan, Wholetime Director, Geojit Comtrade, a commodity broking company. “The brutal liquidation last month and broad bearish outlook for the commodity has contributed to the negative sentiments.
A strong dollar and outperforming equity markets have shifted investor’s attention to more risky assets.” Talking to The Hindu, Somasundaram P.R., Managing Director – India, World Gold Council (WGC), said, “the fall in price is being used as an opportunity to buy more gold. However, the pattern of consumption has changed over the years.”
The proportion of ‘investment gold’ in India, including exchange-traded funds, gold bars, etc. has gone up over the last five years from 17 per cent to 36 per cent now while investment in jewellery has come down from over 80 plus to 64 per cent now.
“As against demand of 864 tonnes in calendar 2012, we estimate indicated demand in 2013 to be 865-965 tonnes,” Mr. Somasundaram said.