Increasing demand has led to spike in cost, say jewellers; customers undeterred
Gold prices are shooting up again. The cost of the yellow metal, which was at its lowest in recent years this month, is rising steadily once more.
This however, does not seem to be deterring customers, who are placing orders by the dozens to buy gold for Akshaya Tritiya, which falls in mid-May.
On Saturday, one sovereign (eight grams of 22 carat gold) was priced at Rs. 20,864, which is Rs. 1,464 higher than the price 10 days ago. On April 17, the cost of one sovereign had crashed to Rs. 19,400.
Jewellers say the price of gold is stabilising, as fears over large banks and countries selling their reserves have been alleviated.
This apart, the rising demand from retail buyers has led to the spike in the price, they said.
Despite the rise, customers are flocking to jewellery showrooms, fearing that the cost will further stabilise, and rise to what it was in early April before the dramatic fall.
The price of the precious metal touched its highest of Rs. 32,815 for a sovereign on November 26 last year.
Vijaya Sridhar is one of the many customers who regularly buy gold on Akshaya Tritiya day, which falls on May 13.
“I plan to buy a platinum ring this year. I have already booked it, as it will be difficult to select designs when the showrooms are crowded on Akshaya Tritiya day. I usually buy something associated with white as it is considered auspicious,” she said.
Jewellers expect that the sales this Akshaya Tritiya will be 20 per cent higher than last year’s sales, when one gram of gold was priced around Rs. 2,700.
The city’s jewellers have also ensured they have an adequate stock of gold coins this year, as they were in acute shortage when prices fell.
Jayanthilal Chalani, president of Madras Jewellers and Diamond Merchants’ Association, said the demand for the yellow metal was high, as it is also the season for festivals and weddings.
Customers who want to make small investments on auspicious occasions usually get lightweight ornaments, or the highly popular gold coins, he said.
“Many customers now choose their jewellery in advance for auspicious days. They pay and take home the ornaments on Akshaya Tritiya day. We expect the cost of gold to go up to Rs. 2,700-2,800 per gram by then,” he added.
The price of silver too, is going up along with that of gold. On Saturday, one gram of silver was priced at Rs. 49.60 against Rs. 44.81 10 days ago.