Daily News
Gold prices surge to Rs. 78,300 amid safe-haven demand and festive buying
The new hit in gold price spurred up to 20% higher footfall in markets like Zaveri Bazaar. With wedding season approaching, demand is pressuring goldsmiths to work extended hours with analysts recommending increasing gold investment allocations from 15% to 25% for enhanced returns.
Mumbai— Gold prices soared to a new high of Rs.78,300 per 10 grams on Wednesday, driven by safe-haven buying amid escalating geopolitical tensions in the Middle East and declining U.S. bond yields. The price increase of Rs.1,500 per 10 grams compared to Tuesday has sparked a notable uptick in consumer interest.
Kumar Jain, spokesperson for the India Bullion & Jewellers Association (IBJA), reported that Zaveri Bazaar is experiencing a surge in activity, with footfalls increasing by up to 20% on Wednesday compared to the previous week. “The festive season is approaching, and with Navratri starting tomorrow, many consumers are visiting stores to pre-book gold for delivery during the festival,” Jain noted.
The Navratri festival, which runs from October 7 to October 12, is traditionally considered an auspicious time for gold purchases. In addition to festive buying, consumers are gearing up for the wedding season, which begins in November and extends through February-March.
The rising demand is putting pressure on goldsmiths, or karigars, who are now working up to 12 hours a day, significantly more than their usual eight-hour shifts.
Jain likened the current situation to a “China moment” for India, pointing out that just as China invested in gold to hedge against inflation, Indian consumers are now turning to the yellow metal.
Bhargav Vaidya, a gold trade analyst, highlighted a shift in investment advice, stating, “Previously, we recommended allocating 15% of one’s investment portfolio to gold. However, with gold prices now yielding 18-20% returns annually, we suggest increasing that allocation to 25%.”
Colin Shah, Managing Director of Kama Jewelry, attributed the strong performance of gold to the beginning of a rate cut cycle in the U.S., with expectations for further cuts in upcoming Federal Reserve meetings. As global uncertainties continue, gold remains a preferred asset for investors looking to secure their wealth.
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