As if the earlier downfall in demand of yellow metal (better known as gold) was not enough to suppress the well being of gold jewellery market, gold has again broken records and surging high in price in India. Beginning with Delhi where gold is crowning highest with the rate of 31, 035rs/ 10gms and constantly affecting others state across the nation. Following Delhi, other states are also facing the swelled priced effect on jewellery market and its demands which were already sinking low. Other states include, Chennai (R31, 000), Mumbai (R30, 995) and Ahmedabad (R30, 905).
High inflation rates and higher gold rates are indicating only one unforeseen catastrophe which is glittering gold sinking lower. Industry experts have estimated that there would be 40% drop during the second half of the year due to the price hike.
Though India is growing through per capita income but the gross GDP and the power of Rupee has been depreciating from last 12 months and is affecting high on economy and price rise in every other aspect of life. To top it this hike in gold prices is nothing but another threat to Indian economy and especially gold makers and dealers.
Though still the precious metal in India has not reached the global standards whereas, International prices rose in anticipation of a fresh round of fiscal stimulus and some friendly policies by the Federal Reserve. Most consumers have postponed their buying decisions which have also lowered the already sinking graph of sales.
Gnanasekar Thiagarajan, director Commtrendz Research, a research firm said, “People have moved from dollar to precious commodities causing prices to surge. With international price increasing and the rupee remaining stable, this is going to impact domestic demand pretty badly.”
Renowned brands of gold will be the first to get affected as contrary to the expectations of industry experts, these nearing festive seasons might also not bring glitters into gold sales. Brands like Orra will be getting badly affected. CEO of Orra, Vijay Jain said, “This is a major concern for us. First, buying sentiment is not so positive, and now this price rise has compounded the problems for the industry. It will come as a shock to the consumers. It might take some time before buying becomes steady again.”
“There are multiple things that are affecting the demand for gold right now. Our business has been impacted due to the duty hike and then due to poor monsoons. The price rise will further postpone any pick-up in demand.” said N Balaji, general manager, MMTC.
According to industry experts, consumers will take some time to get adjusted with the price hike and then only gold can be glittering high with high boosted sales.