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KOLKATA: Gold buying in India remains subdued although lockdown restrictions have been eased in several states and the price of the yellow metal is down by more than 4 per cent. Bullion dealers said jewellers are not keen to restock despite discount offers as consumers continue to stay away from marketplaces on fears of contacting Covid-19.
The price of gold is down by 4.16 per cent from the beginning of June and is hovering around Rs 47,022 per 10 gm in the spot market.
Bullion dealers are offering a discount on gold of nearly $10-$12 per troy ounce, the highest in the last eight months, but jewellers are not keen to restock gold as the flow of customers is still a trickle.
“The fear of Covid has kept customers away from the precious metals. Unless, there are some special occasions such as marriage in the family, nobody is willing to come out and visit jewellery stores to purchase gold,” said Harshad Ajmera, a leading bullion dealer and owner of Kolkata-based JJ Gold House. “This has resulted in a discount on gold moving up.”
But Ajmera is hopeful that the drop in the number of new Covid-19 infections and the pickup in the vaccination drive will encourage people to step out of their homes and shop. “Gold prices have fallen and this is perhaps the right time to buy gold,” he said.
In Kerala, the largest gold consuming state in the country, jewellers are yet to see a pickup in demand for gold. “Jewellers are not buying fresh gold. Their concern is to first clear the inventory that they have. Whatever little gold they require to create new stock is being met through old gold that they have bought from the market,” said a Kerala-based jeweller.
Hareesh V, research head (commodities) at Geojit Financial Services said demand for gold for making jewellery may increase but the investment demand may not go up immediately. “Gold prices have fallen after the US Federal Reserve hinted at a hawkish stance by 2023, which boosted buying in dollars. Gold’s appeal as a safe-haven has disappeared as economic activities have picked up in China and the European Union. Covid cases are also declining and there is no immediate trigger for gold prices to go up,” said Hareesh V. “Even, if prices go up, it will be marginal and not a sudden spike.”
On Monday, gold prices registered a marginal recovery of 0.62 per cent on MCX after reporting the worst weekly decline in 15 months. The yellow metal was supported by the fall in US treasury yields despite a firm dollar.