Investing in gold these days is quite like playing the stock market with volatile shares. The price of gold has been oscillating over the past few weeks, with highs followed by dips.
On Thursday, the price of one gram of 22-carat gold was Rs. 2,458. It had fallen by a few rupees from Rs. 2,470 on Wednesday. On Monday, the price, at Rs. 2,372, was the lowest in 39 months.
Despite the fluctuations and confusion over the price trend, customers have continued to purchase the precious metal. Many feel that a sovereign of gold (eight grams) at under Rs. 20,000 is a good buy.
Jewellers like S. Santhakumar attributed the volatility to a dip in international gold prices. But, customers are yet to reap the benefit entirely, as the demand for this commodity has gone up in the stock market. The sales have gone up by 20-30 per cent since November-end.
N. Ananthapadmanabhan, regional chairman of All India Gem and Jewellery Trade Federation, pointed out that Reserve Bank of India had recently withdrawn its 80:20 scheme requiring a fifth of the precious metal imports to be re-exported. Despite this, there has not been a substantial dip as the import duty still remains at 10 per cent, he said.
“We are working with the Central government to cut it down to 5 per cent. In effect, the 10 per cent duty only encourages gold smuggling from other countries like Singapore and Dubai,” he added. Jayanthilal Challani, president, Madras Jewellers and Diamond Merchants Association, said there were other global factors, including fluctuations in the rupee value, which contributed to the gold price variations. This trend was likely to continue till Christmas, he said.
Meanwhile, jewellers said, sales of gold ornaments through websites were slowly catching up in the city. “This is a new concept here. But, customers prefer to buy heavy ornaments from shops,” Mr. Challani added.
