Live Markets »News & Advice»Market News»Market News Details
Market News Details
Back

This Akshaya Tritiya, price rise fears revive jewellery buying sentiment

Dilip Kumar Jha/Mumbai 14 Apr 18 | 11:40 PM

File photo: A salesman arranges gold ornaments, on a display board, inside a jewellery showroom during Akshaya Tritiya, a major gold buying festival, in Kochi, India | Photo: Reuters

After over a month of weakness, gold buying sentiment has revived in the past two days across India as customers booked in advance for delivery on Akshaya Tritiya, considered auspicious for this purpose. The day arrives this year on the coming Wednesday, April 18.

Related Stories

    No Related Stories Found
Widgets Magazine

Jewellers say they have seen a nearly 50 per cent increase in customer footfall during the past two days. Buyers seem inclined to book their piece of jewellery or bullion now, with a price rise forecast by analysts.

The revival in buying sentiment has at the right time, with occasional buyers taking advantage of the price fall. Many new customers have joined existing buyers to flag off the ensuing wedding season preparation.

"Akshaya Tritiya is considered one of the most auspicious of occasions in India to buy gold. Buyers who stay away from investment in physical gold book some grammage of the bullion to celebrate the festival. The two days of price fall has revived jewellery buying sentiment across the country, otherwise lacklustre over the past month," said Ashok Minawala, director, All India Gem and Jewellery Domestic Council.

Through advance booking, customers ensure delivery of gold ornaments of their choice, and also coin, on Akshaya Tritiya. While jewellers prepare for selling ornaments on this occasion well in advance, many customers found they were not getting their choice in previous years. To avoid a repeat, they have started booking in advance, jewellers say.

"If the current price level continues, we will have a good Akshaya Tritiya and wedding season ahead," said Kumar Jain, director, Umedmal Tilokchand Zaveri, a bullion dealer and jewellery retailer at Zaveri Bazaar here.

Gold sales were estimated at 40 tonnes on Akshaya Tritiya last year. The latest increase in customer turnout might mean higher sales this year.

Standard gold's price declined by Rs 275 from a 14-month peak of Rs 31,095 per 10g on Wednesday. The price closed at Zaveri Bazar on Friday at Rs 30,820 per 10g.

"While the physical fundamentals are yet to catch up, sentiment drivers could still drive gold prices higher this year. We retain our bullish forecast for gold and expect a target of $1,410-1,430 an oz for 2018 as our base case. In a slightly more bullish scenario, if global equity markets indeed see a downturn and if volatility spikes, gold could move towards $1,470 an oz. We expect $1,235-1,270 an oz to act as a strong base for this year, with upwards targets towards $1,440-1,470 an oz. On the domestic front, a Rs 28,800-29,300 (per 10g) zone should act as a strong base for the year and an upside move towards Rs 32,500-33,300 looks likely," said Navneet Damani, associate vice-president, Motilal Oswal Securities.

Gold prices have seen a good start to 2018, with gains extending from 2017 as dollar weakness continued. The rally over the past couple of months has been peculiar, given that bond yields are near three-year highs and global economic growth is broad-based. The US Federal Reserve, after raising rates thrice in 2017, and once in 2018, is on course for two more hikes this year. It is, therefore, a bit surprising that the dollar has failed to gather strength over the past several months.

The recent trade tiffs, with the US government imposing trade sanctions on many other nations, is also supportive of gold prices in the medium term. If a trade war becomes a reality, it could push inflation up and growth down, and that should ease aggressiveness at the US Fed. Which is why it has become the focus of the gold market.

Widgets Magazine

Sensex

Company Price Gain (%)
St Bk of India259.252.98
Sun Pharma.Inds.548.802.97
Axis Bank538.052.86
ICICI Bank266.302.70
Tata Steel532.502.54

Poll

Currently No Poll Available.

Online Portfolio

You can create Online Portfolio here using the below button.

Widgets Magazine