Jewellery Fair Helps Gold Gleam

A jewellery fair in the metropolis polished interest in gold, attracting foreign buyers to partly offset poor local demand, traders and analysts said on Sunday.

They said a week-long fair ending Monday attracted a large number of buyers from abroad, some of whom had struck deals with local jewellery manufacturers.

"The fair has been a success," said an official of the Gem and Jewellery Export Promotion Council (GJEPC), sponsors of the show. He did not give details of the export deals signed.

The extra interest failed to stop standard 24 carat gold falling 45 rupees to 4,584 per 10 grams in the week to Friday.

 

Analysts said the fair, coinciding with a downtrend in world prices, might generate its own tempo despite being organised in the midst of the June-August lean season.

The last burst of demand for gold had ended with the wedding season in May before the onset of the four-month June-September monsoon when most of rural India is busy with sowing of crops.

"There is going to be some urban demand all through the year. Fairs such as this help generate interest in jewellery," said independent bullion analyst Madhusudan Daga.

"A revival in rural demand is expected in September at the start of the winter harvest of crops," he said.

Traders in agricultural commodities said the progress of the monsoon, after a week's delay in its arrival in June, had been satisfactory, except in a few pockets.

Meteorological officials in New Delhi said fears on El Nino, the occurrence of warm waters off the coast of South America, might impair the monsoon were unfounded at this particular juncture.

"It is too early to say if El Nino would affect the Indian monsoon," said one official. "We have to wait till the end of July to make any assessment of the El Nino impact."

Traders said sowing in paddy (rice) in north India had picked up as rainfall had so far been adequate.

"But there is some concern about deficient rainfall in southern India, especially the oilseeds-growing state of Andhra Pradesh," said Navin Shah, president of Bombay Oilseeds and Oils Exchange.

He said the western state of Gujarat, considered the country's peanut bowl, had good and wide-spread rains.

Edible oil prices remained subdued in the week to Friday with an ensured

supply of domestic and imported oils. Groundnut oil lost three rupees to 353 rupees per 10 kg. Imported palmolein was steady at 266 rupees per 10 kg.

"Prices are likely to remain weak. Imports are coming in regularly," Shah said, adding that importers had booked up to 80,000 tonnes of palmolein for July delivery.

Rains also eased cotton prices.

Availability of enough stocks with state agencies also weakened sentiment.

Traders said rains had covered most of India's 9.0 million hectares of area under cotton.

A reduced quota of free sale sugar for the July-September quarter is expected to turn prices firm.

Under its administered dual pricing policy, the government has directed sugar mills to release 750,000 tonnes per month from July onwards against 800,000 tonnes per month in the previous quarter.

Prices of sugar S-30, however, fell 10 rupees per quintal (100 kg) to 1,440/1,470 rupees.

In non-ferrous metals, tin and nickel are expected to fall further under selling pressure following a downtrend in world prices, dealers said.

They said fresh imports of nickel and tin had also improved the supply of both metals the past week adding to existing inventories.

In the week to Friday, nickel lost 300 rupees to 35,400 rupees per quintal.

Dealers said demand for non-ferrous metals had not been picking up due to poor industrial growth in the country.