India’s phenomenal love for
gold is about to hit the peak on November 1 – the
Dhanteras Day – when thousands go on a gold-buying spree. But just a day before the
gold fest, the price of the yellow metal went down considerably. Although experts and
bullion traders predict that the
gold price (per 10 gm) may cross Rs 33,000 mark this Dhanteras, the precious metal continued its falling streak for the 4th straight session and tumbled to Rs 31,450/10 gm in the national capital today, a big dip from the previous close of Rs 31,710, even as premiums stayed at record highs.
So is it time to rush to your nearest jeweller and shop for gold on Dhanteras that marks the beginning of the five-day
Diwali festivities? Most people believe it to be an auspicious occasion to
invest in the precious metal. But why so, you may ask. Mythology has it that the dazzle of gold confused Yama, the god of death, when he came to claim the life of a young prince. Another legend says Dhanteras was the day when Dhanvantari (the god of healing) emerged from the ocean with amrit (nectar that makes one immortal) as gods and demons churned the sea to find it. Both legends mark the occasion as one filled with life force and positive fervour and even today,
Goddess Laxmi,
Lord Kubera and
Lord Ganesha are worshipped everywhere as people pray for wealth and prosperity.
How’s gold doing: A reality check
The worship of
dhan (wealth) on Dhanteras is perfectly in tune with the gold fest that the country witnesses every year. But things could be a lot different this time around. With the yellow metal in short supply due to government’s restrictions on import, the demand for expensive gold has fallen and sales have dropped by 50%, according to industry estimates. In fact, over the past six months,
gold prices have witnessed a roller-coaster ride – fluctuating between Rs 26,000 and Rs 34,000/10 gm.
The
Indian government has been taking several measures to curb inbound shipments of gold to contain the current account deficit (CAD). Only recently, it has raised the import tariff value of gold to $436/10 gm. In another unprecedented ‘gold control,’ it has also banned import of coins, bars and medallions. Consequently, banks and organised players have stopped selling
gold coins and the demand for the same has fallen by 70%. Incidentally, coin sales always reached the peak during
Diwali as corporate houses and common men buy these for gifting purpose.
Does that mean the traditionally ‘golden’ Dhanteras will lose its sheen this year? Not really, as people will consider buying gold if prices stay around 31K or less. Local retailers expect around 20% rise in sales during the current festive season, compared to the last fiscal. However, prices are expected to go up by Rs 300-1,000 per 10 gm on the Dhanteras Day, due to higher premiums caused by supply squeeze. Premium on gold may further rise from the current Rs 1,500-2,000 per 10 gm if demand skyrockets during this period.
New buying trends In spite of current restrictions, India has imported 393.68 tonnes of gold during the April-September quarter this year, as per official data. And the
World Gold Council has estimated the country’s overall gold demand to touch a record 1,000 tonnes in 2013. We expect most of the buying to happen around Diwali and the wedding season, but there is a distinct shift in the buying pattern. Here is a quick look at what’s trending this festive season.
Gold coins won’t be totally missing: Well, you can’t buy them at banks this time, but some jewellers have decided to sell gold coins this Diwali. All India Gems and Jewellery Trade Federation has asked its members to temporarily lift the ban on sale of gold coins, which has been on since July this year. Gold coins are not bought for investment but are rather seen as
shagun and given as gifts, hence the decision.
Lightweight jewellery is getting popular: That’s quite understandable, given the exorbitant price. While light
gold jewellery with semi-precious stones looks pretty and chic on any occasion, gold leafing and gold foil items have become the latest rage. For the 20-plus crowd, silver is in – used for funky designs, ethnic wear and even for traditional pieces. You can also buy intricate silverware for your dining collection or choose from a wide range of silver home décor items that will light up your Diwali.
Platinum, diamonds are the new gold: According to an
ASSOCHAM survey, rising gold prices and short supply are driving
women to more stable
investments like diamonds and platinum this Diwali. On a year-on-year basis, the demand for diamond jewellery has grown more than 25% this year while diamond-studded platinum jewellery has seen more demand in the metros, than the traditional diamond-and-gold jewellery. That’s why 76% jewellers are now focusing more on platinum and diamond jewellery. If you, too, want to follow the latest trend and skip the yellow metal for a change, this Dhanteras-Diwali may bring a different kind of shine in your life.
With input from Agencies
Image: Economictimes.indiatimes.com
