New Delhi: Gold may lose its glitter this Dhanteras as a sharp rise in the prices of the yellow metal has weakened its demand in the domestic market, according to experts.
“On Dhanteras, the gold sales touch around 40 tonnes every year. However, the weak demand may decrease the sales by 50 percent this year,” Surendra Mehta, National Secretary, India Bullion and Jewellers Association (IBJA) told IANS.
Gold imports have also nosedived due to higher prices and an increase in the import duty, Mehta added. India imported only 26 tonnes of gold in September this year, down from 81.71 tonnes a year ago. The imports fell 68.18 percent, as compared to last year. Market experts believe that gold imports have plunged to a multi-year low after the Central government increased the import duty on precious metals from 10 percent to 12.5 percent in the Union Budget in July this year.
“There are three types of gold demand — wedding demand, festive season demand, and regular demand. The regular demand is already low due to the liquidity crisis in the market. Besides, buyers are avoiding to invest in gold much an account of higher prices,” Mehta said.
“Moreover, the gold demand will continue to remain low this festive season,” he added.
Another market analyst pointed out that another reason for the weakened domestic demand last month is that prices in the global market have risen.
“The gold prices in the domestic market follow the trend in the international market. However, the recent fall in prices may improve the festive season demand,” said Ajay Kedia, Director, Kedia Advisory. (IANS)