The sudden spike in gold prices to ₹33,000 per 10 gram-level is expected to drag down the demand for the yellow metal during this Dhanteras and festival season.

The sharp depreciation of rupee against dollar for the last few days has been pushing up gold prices despite weak demand.

On Friday, gold prices rose further for the sixth straight week to touch ₹32,780 and ended at ₹32,650 per 10 gram at the bullion market.

Ahammed MP, Chairman, Malabar Gold & Diamonds, said there is wide-spread concern in the market that the gold price rise will scare away jewellery buyers this festive season.

Jewellers always eye the last quarter of the calendar year to maximise their sales driven by festive and wedding seasons. The price rise will impact volume-based purchase, he said.

Somasundaram PR, Managing Director, World Gold Council, said it is surprising that gold is selling at a discount of $5 an ounce in the wholesale market despite the expected seasonal surge in demand during the Dhanteras and Diwali. Usually, gold demand spikes when prices go up but this time around it has bucked the global trend due to rupee depreciation and customers are convinced with the rally in prices, he added.

Tanya Rastogi, Director, Lala Jugal Kishore Jewellers, said sales during Akshaya Tritiya was not up to the mark as gold rates were flat, but after the recent spike a lot of customers are making advance booking in northern States for Dhanteras.

While consumers are not much worried about the import duty of 10 per cent on gold, the three per cent GST levied on every jewellery really pinches them, said Somasundaram. Vaishali Colin Shah, Director, Rivana Gold and Diamonds, said jewellery purchases may begin closer to Dhanteras as the wedding season starts late this year.

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