Why gold sales will be missing the glitter this Diwali
Subscribe to enjoy similar stories. The annual festival season that typically sees a scramble for gold may see a fall in demand this time, the first in four years, as runaway prices put the yellow metal out of reach for many Indians. Gold price nearing ₹80,000 per 10 gm has curbed new purchases and turned customers to exchanging old ornaments in the December quarter, jewellers said, a time when festivals and weddings spark gold purchases.
“There has been a spurt in prices and volumes could decline by 10-12% (during the festival season), though in value terms, there will be marginal growth," said Suvankar Sen, managing director and chief executive officer of Senco Gold, which runs 165 stores. Spot price of 24 carat gold (99.5% purity) has surged almost 30% in the past one year to a record ₹79,479 per 10 gm (including 3% GST), according to data from commodity exchange MCX. The price is up 6% in the past one month alone, coinciding with buying during the festival season, which runs from 3 October to 29 October this year.
Sen said the prices have been driven by uncertainty ahead of the US elections early next month, fears of an Israel-Iran war and a cut in a key US policy rate last month. A Trump victory could lead to a weaker dollar, lifting gold prices further. The Senco Gold stock has jumped 9.5% to ₹1,378.7 in the month through Friday, coinciding with the jump in gold prices.
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