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Sharp rise in gold prices; see UAE rates for today

New Delhi - 'Moreover, the gold demand will continue to remain low this festive season'

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Gold may lose its glitter this Dhanteras as a sharp rise in the prices of the yellow metal has weakened its demand in India, according to experts.

"On Dhanteras, the gold sales touch around 40 tonnes every year. However, the weak demand may decrease the sales by 50 per cent this year," Surendra Mehta, National Secretary, India Bullion and Jewellers Association (IBJA) told IANS.
Also read: UAE gold rates today

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 per cent, as compared to last 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.

However, the bullion market may lose its sheen this festive season due to the economic slowdown in the country, Kedia added.
In the international market on Monday, gold prices rose over $250 per ounce to $1,500 per ounce as compared to last year. It was trading at $1,242.20 per ounce on October 5, 2018.

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