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| Precious metal sales dip by a fourth on price volatility |
| Dilip Kumar Jha / Mumbai Dec 18, 2011, 00:29 IST |
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Gold has slipped 6.18 per cent since it started falling on December 8.
The sales volume of precious metals has seen a sharp decline in Zaveri Bazar—India’s largest spot bullion market—over the weekend due to volatility in prices and uncertain outlook owing to the global economic scenario.
Zaveri Bazar, which witnesses Rs 500-crore turnover every day, has logged nearly 25 per cent decline in sales over the last couple of days, as traders abstained from fresh booking in anticipation of further price decline.
But, Bhargav Vaidya, an analyst with B N Vaidya & Associates, specified two primary reasons for the fall— volatility in prices and lack of investor confidence. “Investors have hardly anything as investible surplus due to high inflation and interest rate hitting the roof. The benefit of price fall in global markets has not yet passed on to the Indian consumers. Even if the precious metals market stabilises, investors’ confidence would be very low.”
Meanwhile, gold price rebounded albeit marginally and recorded a 0.68 per cent rise on Saturday thereby arresting a continuous fall of seven days.
Standard gold closed on Saturday at Rs 27,440 per 10 gm, against Rs 27,255 per 10 grams during the previous session. The yellow metal recorded an overall fall of 6.18 per cent since it started declining on December 8. Similarly, silver gained a marginal 0.11 per cent or Rs 60 to close at Rs 53,230/kg on Saturday, against Rs 53,170/kg the previous day.
“Small traders, who trade in precious metals on a daily basis, generally remain absent if the market turns volatile. During the last few days, the price kept fluctuating in the range of 3-4 per cent, thereby changing the quote between Rs 60,000 and Rs 70,000 a kg in rupee term. Hence, traders await either the markets to stabilise or indicate a signal with upward bias for fresh purchases,” said Ketan Shroff of Pushpak Bullions, a leading bullion dealer in Mumbai.
Over this week, pure gold opened lower at Rs 28,880 per 10 gm and slumped to a low of Rs 27,285 before ending at Rs 27,565 over its previous close of Rs 29,040, showing a net fall of Rs 1,475 or 5.08 per cent. Similarly, silver started sluggish at Rs 55,800/kg and plunged to a low of Rs 52,765 before concluding at Rs 53,230 from last weekend’s closing level of Rs 56,250, showing a massive loss of Rs 3,020 or 5.37 per cent.
The precious metals took a cue from overseas market that ended with a moderate recovery on Friday. In New York, gold edged higher after its 4-day losing streak lured buyers amidst lower dollar. Gold for delivery in February rose by $20.70 to $1,597.90 an ounce on the Comex division of the NYMEX late yesterday, while March silver contract gained 40 cents to $29.67 an ounce.
Spot gold rallied as much as 1.6 per cent to $1595.3 and traded at $1,593.39 by, off a 2-1/2-month low of $1,560.36 hit in the previous session. US gold rose 1.2 percent to $1,596.3. Spot gold staged a strong rally on Friday, snapping four sessions of losses with possibly its biggest one-day gain this month, as a smooth Spanish bond auction and upbeat US jobs data supported sentiment.
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