Price of the yellow metal surged on Wednesday, but customers undeterred

Gold prices in Chennai surged, as Barack Obama was re-elected President of the Unites States.

As America reaffirmed its confidence in its President, the promise of continuity in his monetary policies for the globe, drove the price of the precious metal up — one gram of 22-carat gold was priced at Rs. 2,939 on Wednesday, Rs. 41 more than Tuesday’s price.

Up until Monday, gold prices had been dipping steadily, but when the US election results came in on Wednesday, they shot up. In just two days, the cost of a sovereign of gold (8 grams) went up by Rs. 632 and was sold at Rs. 23,512 on Wednesday evening.

The sudden hike in prices left many customers, who had wanted to reap the benefit of the falling costs, perturbed.

Jewellers in the city said that Obama’s win, and expectations of strong monetary policies, would prove advantageous for gold over the dollar in investment.

“We depend on international prices as our country largely imports gold. A change in governance would have lead to further strengthening of the US dollar and gold’s value would have weakened,” said N. Ananthapadmanabhan, regional chairman of All India Gems and Jewellery Trade Federation.

For customers, it meant shelling out more money for less gold. S. Venugopal, a resident of Purasawalkam said: “I wanted to invest in gold coins as the price was decreasing. I was disappointed at the increase by nearly Rs. 80 per gram in two days. I bought some coins as the price may further go up as it is the festive season.”

According to jewellers, the increase in price has not affected business, as people are buying up the precious metal fearing a further rise. Jayanthilal Chalani, president of Madras Jewellers and Diamond Merchants Association, said that the number of customers who exchange old jewellery is still low, as the price of gold is still relatively lower than what it was in September. Several customers prefer to buy light-weight jewellery and gold coins, he said. The yellow metal is expected to cost more by this year-end.

The cost of silver too, went up marginally. One gram of silver was priced at Rs. 64.60 on Wednesday compared to Rs. 63.10 on Tuesday. Jewellers said silver is growing to be the best choice of investment in metals after gold. Platinum jewellery has not as lured many customers as there is not much resale value, jewellers added.

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