Kolkata: Demand for gold has picked up in metro cities and state capitals of India as prices slipped nearly 2 per cent in the last 10 days, bullion traders and dealers said.
They said the discount on gold has come down to $1per troy ounce from $4-$5 in mid-November, indicating a pick up in demand. On Monday, gold was hovering in the range of Rs 29,100 per 10 gm in Mumbai’s Zaveri Bazar.
“The demand is picking up in metro cities and state capitals. But the demand from tier 2 and tier 3 cities is yet to pick up. Once the
GST issue settles down, demand from these areas will also emerge,” Nitin Khandelwal, chairman at All India Gems & Jewellery Trade Federation (GJF), told ET.
Traders say people who have booked profit in the stock market are investing a portion of it in gold as they are finding the current price level attractive.
“The confidence in the market is gradually recovering,” said Shekhar Bhandari, business head for global transaction (banking and precious metals) at Kotak Mahindra Bank. “People who have booked profits from the equity markets are looking at gold as an area of investment. The current price level is attractive for investment if investors take a long position.”
Though demand is showing recovery, India’s gold consumption is likely to fall to its lowest in eight years in 2017. Gold demand had fallen 24 per cent from a year ago to 145.9 tonnes in the quarter to September. Analysts said GST and anti-money laundering legislation around retail jewellery transactions deterred buyers in the quarter.
The anti-money laundering legislation was withdrawn in September end. Gold prices fell in Asian trade on Monday as the dollar gained on expectations that the US economy will expand after the Senate passed a bill to overhaul the tax system. Spot gold was down 0.6 per cent at $1,272.91 an ounce after touching a high of $1,289.50 on Friday. US gold futures were down 0.5 per cent at $1,275.80 an ounce. “If gold breaks $1,265 level, it may go down to $1,220. In rupee terms, prices may moderate to Rs 28,800 per 10 gm this month,” said Mukesh Kothari, director at RiddiSiddhi Bullion.
Source: economictimes.indiatimes.com