Gold retains its glitter as price zooms amid coronavirus gloom

If there is one thing that’s glittering amid all the Coronavirus gloom, it’s the yellow metal. Gold has been on a record-busting spree and zipped past the Rs 50,000 mark per 10 gm (24k) on Wednesday.

“There is panic about Covid-19 as cases are shooting up in markets like the US, which is why people are investing in gold as a safe haven. Also, despite gold prices peaking internationally at about $1,779 per ounce, domestic prices have not gone up as much due to the appreciation of the Indian Rupee compared to the US Dollar,” said Avinash Gupta, director, All India Gem & Jewellery Domestic Council.

The high price has also not deterred gold lovers from showing up at jewellery stores since the easing of lockdown.

“We have a wedding in the family in August and have come to select designs. We hope to buy our gold by month-end. I hope prices don’t go up further by then,” said Md Akram, who was shopping at a store in Somajiguda.

“We had an instalment scheme that is set to expire next month. So, we have come to encash it. Gold is a good investment now, given that its price is on a constant rise,” said K V Lakshmi a gold buyer at a store in Panjagutta.

According to Ajoy Chawla, CEO, jewellery division, The Titan Company Ltd, it is not a flash in the pan or pent-up demand that jewellery retailers are seeing.

“We are seeing a good 65-70% recovery rate across stores as compared to the same period last year despite a 40% rise in gold rates. Ticket values have gone up as buyers continue gold purchases perhaps because of the uncertainty around the economy and Covid-19 and also because gold is the only investment class that is appreciating at a time when interest rates and mutual fund NAVs are falling,” he said.

Another key factor spurring gold sales is the demand unlocked by deferment of weddings and restrictions due to Covid-19.

“With DIY or intimate weddings emerging as a trend, the wedding-related expenses on venue booking, catering, etc. have reduced and customers have more disposable income at their end, which is now being allocated to investing in gold jewellery despite a surge in prices over the past three quarters. Additionally, shoppers who postponed their weddings are making purchases,” said Kalyan Jewellers executive director Ramesh Kalyanaraman.

Pointing out that footfalls and sales have been steadily improving since the lockdown eased, Darshan Gupta, partner, Mangatrai Jewellers, said people are continuing to buy gold as they know prices are only going to go up. “Gold was at Rs 5,020 per gm (24k) today and even if it falls, it will be temporary. I won’t be surprised if prices shoot up to 6,000 per gm by the end of the year,” he said.

Agreeing, PK Siraj, director & retail head, Malabar Gold said that though overall sales are down as compared to the same period last year, they are witnessing a 75% recovery which is a good sign as gold is not an essential commodity.

City-based wedding planner Priyanka Ganeriwal Allahabadi said only 10% of the gold purchase is for weddings and the rest is for investment. “Instead of bars, most in the city are buying gold jewellery for investment and the rush in stores is mainly due to that,” she said.

Courtesy: TOI