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The festival of light and recent fall in gold prices is all set to bring back the shine on yellow metal, boosting jewellery demand which has been lagging for last few months.
Standard gold prices have fallen four per cent to ₹30,050 per 10 grams on Monday from ₹31,200 recorded on September 30.
Expectations are that the good monsoon is set to enhance farmers’ income after two years of consecutive drought and give a fillip to gold demand in the rural areas.
Saurabh Gadgil, Chairman, PNG Jewellers and Director Indian Bullion and Jewellers Association, said the industry is expecting gold jewellery sales to increase 50-60 per cent over last year during the festival and wedding season over next six months.
“The market sentiment looks good as gold seems to be secure investment in the current Indo-Pak political scenario and the ongoing US presidential elections. The good monsoon this year will play a key role in bringing back rural demand in an agro-based economy like India,” he said.
In line with the bullish market sentiment on gold, the discount on gold offered by bullion dealers to jewellers has been narrowing in last two months.
The discount on gold has dipped to $4 an ounce (about 28 grams) on Monday from $35 an ounce registered on August 10, as per the premium and discount polled by commodity futures exchange Ncdex.
Even after sourcing gold at discount jewellers have been reluctant to cut jewellery prices, but are throwing in lot of freebies and offers to attract buyers. Tribhovandas Bhimji Zaveri (TBZ) has waived making charges on all diamond jewellery and fixed making charges at ₹249 per gram on all gold jewellery since the start of this month. Some of the jewellers have introduced collection of light weight jewelleries to attract customers.
Playing to the gallery, the government is all set to launch its sixth series of Gold Bond Scheme in next few days to encash on retail investors’ sentiment.
The government has been working relentlessly to divert physical gold demand to gold-return linked financial assets and has collected about ₹3,059 crore through series of five gold bonds issues valued at about 10.22 tonnes of gold.
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