Gold traders turn upbeat as wedding season begins

Kolkata: After a month of subdued sales, gold traders are upbeat that demand will pick up from January 16, which marks the start of the Indian wedding season, aided by a drop in prices.

“Purchase of gold had slowed down in the last one month as the period was considered inauspicious for buying gold. Now that the wedding season has kicked off, we are expecting good movement in the market,” said Surendra Mehta, national secretary, India Bullion and Jewellers Association (IBJA).

Even the price-sensitive eastern market is witnessing a positive sentiment among consumers. “We are getting enquiries from prospective customers. Also a drop in price is attracting consumers to buy gold,” said Suvankar Sen, executive director, Senco Gold & Diamonds.

On Wednesday, the price of gold was 3.63 percent down from the high of Rs 41,350 per 10 gm attained on January 8. In 2019, the rising price of gold and a slowdown in economic activity had impacted demand for the metal in India, prompting the World Gold Council to estimate that annual gold demand in India would be about 700 tonnes. “People have to buy for wedding. This is a forced demand,” said Mehta.

In what could be good news for the trade, buyers even in rural India are showing interest in the yellow metal. Rural areas accounts for 60 per cent of the gold consumed in the country, largely because the precious metal is considered an important asset class in the agrarian community.

Nitin Khandelwal, an Akolabased jeweller, said that even a month ago people were not interested in purchasing gold. “A better Rabi crop prospect may have enthused them to buy gold. However, the demand is for light-weight jewellery only,” he said.