Gold rush to summit sees demand trampled
jewellers at Mumbai’s Zaveri Bazaar, who said the rise in prices is keeping customers away. Demand crashed 70% in the March quarter, according to them.
However, they’re optimistic about a recovery in sales with Akshay Tritiya, an auspicious occasion for buying gold, coming up early next month. Zaveri Bazaar is Asia’s biggest gold market and has a daily turnover of `. 450- 500 crore.
“The constant rise in prices has dented demand in a big way in this quarter,” said Surendra Mehta, national secretary of the India Bullion & Jewellers Association (IBJA). “According to our estimate, demand for gold jewellery at Zaveri Bazaar has fallen by 70%” in the March quarter, compared with October-December 2023.
However, investment in bars and coins rose 20-30% in the same period, according to Mehta. The Reserve Bank of India uses IBJA’s gold rate to decide the price of sovereign gold bonds. The price of gold has risen from `58,790 per 10 gm on October 1 last year.
Over the past decade, the return on gold has been 148%. In 2014, gold was `28,006.50 per 10 gm. Prices could move up further, analysts said. “Despite gold at an all-time high, the outlook still remains positive amid uncertainty over interest rate cuts by key central banks and (with) oil prices on the move, inching towards $90 per barrel,” said Pranav Mer, vice-president, equity brokerage group, commodity and currency research, JM Financial Services.
“Technically, we have seen a rally of nearly 10% in the past five weeks. Now we expect some profit-booking. However,
