Zee Media Bureau
The government policies and general elections are likely to play dampener for the overall jewellery business during this Akshaya Tritiya, considered one of the most auspicious day to buy gold, feels the industry.
India is celebrating Akshaya Tritiya on Friday, the second-biggest gold buying festival when it is considered auspicious to buy gold.
"Due to the ongoing Lok Sabha elections there might be a problem in momentum this year during Akshaya Tritiya, as the general sentiment for bullion is weak. Last year, the price was very attractive," All India Gems & Jewellery Trade Federation (GJF) Chairman Haresh Soni told the agency.
However, the industry is still optimistic as gold prices are ruling steady and expects sales, he said.
"We are optimistic as the momentum has already begun in places where elections are over. We are expecting jewellery sales in small denominations," he added.
Echoing similar views, Gitanjali Gems Chairman and Managing Director Mehul Choksi opined that due to government policies in order to restrict gold imports, there are not enough stocks in the market for the festival demand.
"The curbs imposed by the government to restrict gold imports in order to control Current Account Deficit has resulted in lack of enough stock in the market. This is going to affect the demand, which might be even half of last year," he said.
Further, he said the general elections might play dampener on overall sales as people are waiting for formation of new government, which will give a direction to the market.
Naveen Mathur of Angel Broking said the general sentiment is negative for gold in the country and the sale is likely to be similar or little less than last year.
"The general trend is that people are waiting for the election results to see where the market is moving. Moreover, the prices are steady with no indications of moving upward for the time being, creating a negative sentiment among consumers," he added.
However, Tara Jewels Chairman and Managing Director Rajeev Vasant Sheth said this year the pre-bookings are looking good, looking pretty similar to last year.
"We are expecting demand for gold to be like that of last year during this Akshaya Tritiya. Due to sudden decline in prices last year, the demand for gold shot up during April-May last year. This year the prices are ruling steady and pre-bookings are good and are looking similar to last year," he said.
He added that the lack of purchase during Diwali last year will spill over to this Akshaya Tritiya.
According to World Gold Council, the intrinsic demand continues to be robust even as the government policies continue to haunt the industry.
"Last year this time there was a huge drop in gold prices. This gave a huge boost to the demand. This year its not going to be like that as government policies like higher import duty, 80:20 scheme and banks not being allowed to sell coins are haunting the sector. However, the intrinsic demand continues to be robust," WGC Managing Director, India, Somasundaram P R said.
Even as there are no overwhelming factors, the imports have improved and there is a far more congenial atmosphere which looks positive for gold, he said.
Snapping its two-day falling trend, gold prices rebounded by Rs 185 to Rs 30,585 per 10 grams at Delhi bullion market Thursday on revival of buying, driven by ongoing wedding season demand.
Silver, however, remained under selling pressure and lost Rs 420 to Rs 42,080 per kg.Here are the city wise gold and silver rates:
(Gold rates per 10 gm/Silver rates per Kg)Mumbai
GOLD: Rs 29,502 / SILVER: Rs 42,833Delhi
GOLD: Rs 30,585 / SILVER: Rs 42,080Chennai
GOLD: Rs 30,050/ SILVER: Rs 42,270Kolkata
GOLD: Rs 30,150/ SILVER: Rs 42,400Bangalore
GOLD: Rs 30,384/ SILVER: Rs 42,800Hyderabad
GOLD: Rs 30,100 / SILVER: Rs 44,000
With agency inputs