Gold prices may rise another Rs 3,000 per 10 gram; consumers expected to exchange old gold for new this festive season

Gold prices set to rise: The ongoing conflict between Israel and Palestine has led to a surge in gold prices, a development that jewelers feel may prompt consumers in India to sell their gold holdings ahead of the upcoming festival season. According to an ET report, this trend will be driven by individuals wanting to take advantage of the spike in prices and purchase new gold ornaments.
Gold prices in India have already risen by Rs 874 per 10 gm, reaching Rs 57,415/10 gm, following an attack by the Palestinian group Hamas on Israel over the weekend. Industry insiders predict that prices could rise even further by Rs 2,500-3,000 per 10 gm if the conflict escalates in West Asia.
Suvankar Sen, the MD & CEO of Senco Gold & Diamonds was quoted as saying that the exchange of old gold is expected to increase by up to 15% this festive season compared to last year due to the upward movement of gold prices.
He further said that the exchange of old gold accounts for 25-30% of the company’s business in urban areas and 30-35% in rural areas. Sen attributed this trend to the higher gold prices and the compulsory requirement of the Hallmark Unique Identification (HUID) number, which has prompted people to prefer exchanging their old gold jewelry. Additionally, the rural markets have experienced lower liquidity, resulting in higher participation in the old gold exchange.

Gold Buying Tips: Sovereign Gold Bonds Vs Gold ETFs, Gold MFs Vs Gold Coins, Bars, Jewelry Explained

Ajoy Chawal, CEO of Tanishq, revealed that their gold exchange business already accounts for 41% of their total business and they aim to increase it to 45% in the current financial year. This strategy helps reduce the import of gold.
Similarly, Malabar Gold & Diamonds reported that their gold exchange program contributed 36% of their total sales in the previous fiscal year, and they anticipate a similar contribution in the current year.
Gold prices are mostly influenced by global inflationary trends and geopolitical developments. Jateen Trivedi, VP Research Analyst at LKP Securities, explained that the geopolitical tension in West Asia is likely to increase pressure on risky assets such as equities globally. Consequently, it is expected that a portion of the outflow from equities will be allocated to gold.
Meanwhile, Vipul Shah, Chairman of the Gem & Jewellery Export Promotion Council, stated that it is too early to assess the impact of the conflict on India’s diamond trade. The situation is being closely monitored, and a definitive assessment will be made in due course.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *