Jewellers Seek Steady Gold Supply

Jewellers have demanded an uninterrupted supply of gold to maintain exports as the domestic market is stagnant, dealers said on Monday.

They said the focus had now shifted to agricultural operations with the arrival of monsoon rains. Dealers in Karachi, Pakistan's main commercial centre, said they would expect gold to remain weak for want of demand from jewellery makers.

In Dubai, dealers said the onset of summer had kept tourists away from the Gulf shopping centre while poor demand from India, the world's largest consumer of gold, had depressed prices.

Jewellers in Mumbai said supply of gold had been irregular following a policy switch under which they received gold through bonded warehouses. "Procedures have been very cumbersome and time-consuming," said Vishwmitter Kapoor, a leading jewellery exporter.

 

Kapoor said supply of gold through its bonded warehouses had not been satisfactory. Jewellery exporters receive their supplies of gold at international prices from the Minerals and Metals Trading Corporation (MMTC) and the State Bank of India (SBI).

The government in its recent export-import policy had directed both MMTC and the SBI to supply gold through bonded warehouses. MMTC has opted for the policy shift while the SBI is continuing with the old policy extended up to June 30. "We want the old policy to be further extended so that jewellery exports are not affected," Kapoor said.

In the week to Monday, gold prices fell Rs 40 to Rs 4,600 per 10 grams. Dealers said demand for gold had been sluggish since the end of the wedding season in May and the onset of the four-month June-September monsoon in June.

"Sliding global prices have affected local sentiment. I expect gold prices to remain subdued in the coming days," said Babubhai Jain, a leading dealer.

Dealers in Karachi said they expected gold prices to remain mixed in the week on low demand from jewellery makers. Traders in Dubai said the onset of the Arabian summer and the exodus of expatriate workers for holidays had affected demand.

Tourists are staying away due to the heat, and demand from India is weak as investors wait to see what riches the monsoon will bring, they added. "If the monsoon is goo, purchasing power should be up and the gold market should improve," he added.