Jewellers see 30% more gold sales in Diwali

Despite fluctuation in gold prices, jewellers across the country are optimistic that sales of the yellow metal during Diwali week, starting today, could rise 25-30 per cent.

The general feel good factor arising out of a robust economic growth and increase in income both in urban and rural India are also seen driving demand for gold jewellery, traders said.

Indian economy grew 8.9 per cent during April-June, the first quarter of financial year 2006-07, driven by buoyant industry and services sectors.

Gold buying is also prompted by fears that prices may rise further. Research organisations and analysts have predicted a further rise in gold prices buoyed by strong investment demand. Some experts have even forecasted prices to test $1000 an ounce by December.

"It is very difficult to predict how prices would move in the future. Currently, prices are at their lowest and hence people would want to grab the opportunity," said Prasana Kumar, partner of Chennai-based Nathella Sampath Jewellerie.

He expects sales to rise 30 per cent. Standard gold opened at Rs 8821 per 10 gram in Mumbai and closed at Rs 8810. Pure gold opened at Rs 8872 per 10 gram and closed at Rs 8865.