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Dhanteras 2019: Gold prices increased from Rs 32,000 to over Rs 39,500 in a year

Dhanteras 2019: Gold demand has been muted this festive season. In fact, sales were 20% lower this Dusshera compared to previous year. Overall gold imports are down 12% this year

twitter-logo BusinessToday.In        Last Updated: October 24, 2019  | 18:01 IST
Dhanteras 2019: Gold prices increased from Rs 32,000 to over Rs 39,500 in a year
Dhanteras 2019: As per Ahammed, the promotional offers would cause a 20%-30% increase in sales in terms of value and help to offset the rise in the gold price

Dhanteras 2019: Gold prices have increased from Rs 32,000 on Dhanteras last year to over Rs 39,500 ahead of the festival this year. Gold price per 10 gramme in Delhi today stood at Rs 39,380; Rs 39,550 in Mumbai; Rs 39,515 in Kolkata and Rs 39,640 in Chennai, respectively. Moderate gains were seen in gold and silver prices on Wednesday as well.

As per commodity analysts, the price of the yellow metal is to remain less volatile, with support level around 37,800 while resistance at 38,100 zone. Gold domestic futures too rose in early trade. On MCX, gold futures prices were up 0.11% to Rs 38,045 per 10 gram. Silver also edged higher, rising 0.3% to Rs 45,442 per kg on MCX. 

Dhanteras 2019: Gold prices float around Rs 38,000 in Diwali week

Gold demand has been muted this festival season. In fact, sales were 20% lower this Dusshera compared to previous year. Overall gold imports are down 12% this year.

"Elevated prices and hike in import duty by 2.5% also took a hit on gold imports that were down 12% in 2019. Gold imports for 2019 have been to the tune of 565 tonnes until September compared to 644 tonnes in the same period last year," Kishore Narne, commodities expert at Motilal Oswal Financial Services, said.

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However, demand could pick up around Dhanteras festival, due to discounts offered by jewellery chains. "Despite the volatility in gold prices, the retail gold trade industry is likely to see a gradual uptick in demand and sales in the near-term," Ahammed MP, Chairman of Malabar Gold & Diamonds said.

Although elevated prices will remain a point of concern, Dhanteras, Diwali festival and wedding season account for a major share of the annual revenue of jewellers across India. Jewellers pan-India have offered a wide array of discounts and promotional offers this season, which will likely offset higher prices leading to higher retail sales volume.

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As per Ahammed, the promotional offers around Dhanteras would cause a 20%-30% increase in sales in terms of value and help to offset the rise in the gold price.

"Most of the jewellery retail chains have lined up attractive discounts and offers to perk up retail demand and sales to cash in on the wedding and festival season demands," Ahammed stated. "Retail trade has also firmed up marketing, merchandise and expansion strategies to woo both the festive and bridal jewellery buyers," he added.

Globally, gold prices held ground above $1,490 per ounce today as investors awaited more news on Brexit. Further developments on US-China trade talks is another key factor upon which investors await clarity. 

Following heavy demand from safe-haven buyers amid ongoing geopolitical tensions, gold had risen to Rs 40,000 level last month.

By Rupa Burman Roy

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