High gold prices dampen buying on Akshaya Tritiya

The quantity of gold purchased will be less compared to last year as the prices of the precious metal are higher, said Karvy Comtrade analyst G Harish. However, demand will remain high, he added.

Gold prices (24-carat) have jumped nearly 25 per cent to Rs 11,700 per 10 grams as compared to Rs 9,500 a year ago.

 

Akshaya Tritiya, observed on Wednesday and on Thursday, is considered auspicious for buying gold. Harish said the fall in gold import in April would reflect in the consumption.

"The demand for gold does not depend only on local festivals, but also on international factors. I don't see any shift in fundamentals," he added.

Meanwhile, All India Gems and Jewellery Trade Federation Chairman Ashok Minawala said the trend of increase in demand for the yellow metal was visible two days before the festival. It is expected to continue through the festival, he said.

Further surge
Gold prices surged further by Rs 150 per 10 grams on the bullion market here on Wednesday, owing to increased buying influenced by the firm trend in overseas markets.

Gold, which gained Rs 150 on Tuesday, rose further by Rs 150 to Rs 11,820 per 10 grams on heavy buying by stockists and jewellery fabricators, marketmen said.

The buying picked up on reports that gold rose in Asia for a fourth day as crude traded near $122 a barrel, boosting the appeal of the metal as a hedge against inflation, they added.