 "gold")
Gold in India is selling at a discount of $3 to the imported price in the last two days following a sudden spurt in international gold prices.
Last week, gold was trading at around $1,300 per ounce because of geopolitical tensions.
On Tuesday afternoon the price of global gold was quoted at $1,284 per ounce while in the Mumbai spot market standard gold opened at Rs 29,400, which is a discount of $3 per 10 gm and jewellers say such a wide discount was seen for the first time this year.
Gold import has slowed in the past few days due to discounts. Jewellers, according to a banker, are “not putting in fresh orders at high prices but most have built inventory, which was purchased when prices were lower”. Hence their valuations of inventory are higher and if international prices stay high, jewellers will have a cushion to offer promotional schemes also.
In India, the import of the yellow metal and its demand were on the rise for the last few months and there was huge optimism. In March 100 tonnes gold arrived. Organised jewellers say gold import till March was to build inventory in showrooms.
“Consumer demand is very positive. It has been helped by the fact that most regulatory challenges are now behind, such as excise duty, clarification on deposits, and PAN card requirement. Today, both the consumer and the industry have come to accept that. We are looking forward to a very positive Akshaya Tritiya," said Vijay Jain, chief executive officer, ORRA.
He says jewellery demand on account of Akshaya Tritiya is expected to be good and may be 30-40 per cent higher than that of last year. But gold coin demand may be 10 per cent less, going by the trends so far. According to him, consumers are buying mostly small-ticket jewellery, though the number of consumers is much greater than in the past.
This year international prices of gold have increased 11.9 per cent and are today trading around $1,284 per ounce while in Mumbai spot gold is up only 5.4 per cent during the same period.
This is due to the strengthening rupee and in the past few days, discounts have helped Indian prices rise slowly.
Aditya Pethe, director, WHP Jewellers, a Maharashtra-based jeweller, said that “discounts and the strong rupee keep will keep Indian gold prices lower ahead of Akshaya Tritiya. The year as a whole will be good for gold with overall demand on Akshaya Tritiya and during the year expected to be 15-20 per cent higher than last year”.
However, according to him, the GST rate will be the decisive factor in gold demand because if the rate is set at a higher level and unorganised jewellers are not covered, cash-based deals will increase again and organised jewellers will suffer.
