Jewellers Restock Gold After Prices Drop 4%

Kolkata: After a lull of almost a fortnight, there was some buzz as demand showed an uptick in the gold market. Price of gold has dropped by 4.17 per cent since February 20, prompting jewellers to restock the metal. The discount of $2-3 per troy ounce at the B2B level last week has disappeared, indicating demand is picking up.

The market expects gold prices could slip to Rs 31,700 per 10 gm by this weekend. On Tuesday, gold price was hovering around Rs 32,445 per 10 gm (without GST). “We are seeing some movement in the market after almost a fortnight. Rupee has appreciated, too, which is supporting gold prices. Indians have started buying jewellery after a long gap,” said Mukesh Kothari, director of RiddiSiddhi Bullion.

In the international market, spot gold was down 0.1 per cent to $1,285.51 per ounce, while US gold futures were flat at $1,287.50 per ounce. Himanshu Gupta, vice-president (research), Globe Capital Market, said: “We are expecting gold to slide further by the weekend. There are three main reasons for this. Firstly, a lot of profit booking is on. Secondly, it appears that US-China trade talks are heading towards a positive end and thirdly, the US economy numbers have not turned out to be bad.” Some analysts said a lot of money was parked in gold in the beginning of the year.

“Investors were waiting for clarity on tariffs. Now that there is a little bit of optimism on tariff, gold is losing its safe haven status, may be for the time being,” said one analyst. Internationally, investors are pulling cash from the world’s largest gold exchange-traded fund at the fastest pace in more than a year as easing trade tensions push buyers out of safe haven assets. The $33-billion SPDR Gold Shares ETF saw net withdrawal of $496 million on Friday, the most in a single day since February 2018. That pushed the five-day total to about $720 million, marking the fourth consecutive week of outflow.

HDFC Securities said the stronger dollar index and rise in US bond yields may pressure gold prices further during the week as markets are awaiting the nonfarm payroll data on Friday. Silver prices followed gold with international spot near $15, decline in base metals on China growth concerns and a sharp fall in palladium prices.

Courtesy: Economic Times