Steep gold prices may spoil Dhanteras party

The precious metal prices are up by about Rs 2,000 per 10 grams compared with last year.

Ahead of Dhanteras, gold buyers are wary of purchases and jewellers fear the D-Day after all may not set the cash registers ringing as the prices of yellow metal have gone through the roof.

Jewellers expect the rising gold price to lead to a plunge, by as much as 50 per cent, in the average demand for this festival this year.

The prices this year are up by about Rs 2,000 per 10 grams as compared with last Dhanteras Day prices.

So much is the consternation in the trading circles that many even think Dhanteras Day sales volume could end up lower than the average daily sales.

Gold prices have gone up 19 per cent to Rs 10,500 per 10 grams from Rs 8,820 on the Dhanteras Day last year. The prices have further increased by about Rs 200 per ten grams in Delhi since yesterday.

"Prices are moving in such a manner that buyers are in catch 22. Investors rather than going for huge investment in the physical market, are playing safe by buying small quantities of gold to fulfill their religious need," Bishan Seth, secretary, Chandni Chowk Jewellers Association, said.

"The rising prices may hit sales by 15-20 per cent tomorrow. Consumers, who normally buy 10-20 grams of gold on the day of Dhanteras, might buy only 2-5 grams. Some of them might even keep away from buying gold, and would rather buy utensil or other metals," Om Sons Jewellers' Suresh Varma said.

"Although the festival buying has already set in at Chandi Chowk, Delhi's oldest market, jewellers are overtly concerned about sluggish sales. While demand is likely to keep the market abuzz with festive activities, the sales might be hit hard," Seth said.