Weak rupee could cause gold prices to rise this Diwali
today Oct 16, 2018
Due to a weak rupee and a rise in the international price of gold, this Diwali season could see Indian gold prices rise by up to 3.15 percent but the industry is expecting a better festive season than last year.
Gold prices are generally on the rise but this indicates that gold is being seen as a “safe haven” for investment as other categories are proving too unstable. This is part of the reason that festive gold sales are expected to be high than in 2017, according to industry experts as reported by ET Bureau.
“All other asset classes are in the red except gold,” Nitin Khandelwal, chairman of All India Gem & Jewellery Domestic Council, told ET Bureau. “Apart from marriage season demand, we are hoping gold to attract investment demand as well.” Jewellery is a popular gift during Diwali and so the season is one of the most important times of the year for jewellery brands in India. India imports around 800 to 850 tonnes of gold a year and 60 percent of this is purchased by rural customers.
Equity, the bond market, and the NBFC market are all currently volatile in terms of returns on investments. This has made gold a good, and currently safer, alternative and is leading experts to foresee it emerging as an asset class this holiday season.
Surendra Mehta, the national secretary of the India Bullion and Jewellers Association has predicted that gold prices may reach Rs 32,700 ($444) per ten grams. This marks an increase of 3.15 percent compared to October 12 when it was valued on the market at Rs 31,700 per ten grams.
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