Record high gold prices hit buyers but ETFs find favour
HYDERABAD/MUMBAI: The current high prices of gold led to lukewarm demand for the yellow metal on
Akshaya Tritiya
, despite jewellers offering various schemes like slashing making charges for jewellery and offering gold jewellery as prizes for lucky buyers. The demand for
gold exchange-traded funds
(ETFs), however, jumped on both the exchanges on Wednesday.
Earlier in April, the price of the precious metal rose above the Rs 1 lakh/10gm level, an all-time record. On Wednesday, the price in retail markets around the country hovered between Rs 94,000 and Rs 95,000.
Across India, jewellers designed schemes and offers for consumers to soften the blow of steep gold prices and encourage more customers to shop. For example,
Malabar Group
offered up to 25% off on making charges of gold jewellery and studded jewellery.
The company also had an advanced booking facility in place, which allowed customers rate protection by enabling them to book jewellery with a minimum down payment of 10% of the total value and pay the rest based on the booked rate or the prevailing market rate-whichever was lower, said chairman MP Ahammed.
Some of the purchases were driven by investment-based needs and the growing desire to hedge against further price rises, he said.
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According to Darshan Gupta, partner at Mangatrai Jewellers in Hyderabad, the mood among gold buyers was 'lukewarm'. Gupta, who has been trying to woo customers with offers like 'no making charges', said despite all their efforts, the sentiment to buy was lacking. "Business is expected to be at least 30% lower than last year's Akshaya Tritiya," he said.
Although business in terms of volume was lower than last year, in terms of value it was almost similar, according to data from the India Bullion & Jewellers Association.
Approximately 20 tonnes of gold worth Rs 18,000 crore was sold across the country during the day. In the Mumbai market alone, about 2.5 tonnes of gold worth about Rs 2,350 crore is estimated to have been sold.
Rising gold prices also pushed consumers to opt for more pocket-friendly options. PC Chandra Jewellers, for instance, saw more customers queuing up for lightweight gold jewellery and silver. Some diamond pieces, too, found favour with customers.
The demand for ETFs showed good traction on the bourses. On the NSE, ETFs worth about Rs 340 crore were traded, while on the BSE the corresponding number was nearly Rs 30 crore.
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