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Sale of old Gold up 10-15% YoY

Retail Jeweller India

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Gold sale

KOLKATA: Indians are selling their old jewellery to take advantage of a rally in local gold prices. Jewellery shops and gold refiners in Mumbai’s Zaveri Bazaar, the country’s largest bullion market, told ET that the sale of household gold this month is up 10-15 per cent year on year. A further uptick in sale of old jewellery is likely in the coming weeks as bullion prices are expected to rise, experts said.

Gold prices have rallied 13 per cent so far in 2019, with COMEX gold prices staying above $1,420 per troy ounce and MCX gold prices hitting ₹35,100 per 10 gm. Gold has regained safe haven status due to the global economic growth worries from a prolonged US-China trade war, geopolitical tensions on Iran, and US Federal Reserve rate jitters.

In the spot market, gold was available for ₹35,198 per 10 gm on Monday, up 17.73 per cent from the ₹29,895 per 10 gm recorded on July 22, 2018.

The expectation of monetary easing by major central banks has lowered investment confidence, which in turn has supported investors’ rush to safe haven assets like gold. Gold prices rallied sharply, being the favourite safe investment asset, with the fall in dollar index and a decline in US bond yields.

Gold prices in India got a boost after the government raised the import duty on gold by 2.5 per cent to 12.5 per cent. The higher price of gold at the exchange has prompted people to sell old gold to take advantage of the price.

The wider spot-to-future discount has also raised an arbitrage opportunity with traders buying gold from spot and marking delivery in the exchange to tap the clear price gain.

Courtesy: Economic Times

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