Gold prices fell below Rs 1.2 lakh per 10 gm on Tuesday after three weeks that will likely boost volume sales of the precious metal in the upcoming wedding season in the country, gold traders said.
Expectant jewellers have started restocking gold to take advantage of the falling price of the yellow metal keeping in mind the November- March wedding season.
On Tuesday, retail gold was trading at Rs 1,19,164 per 10 gm without a Goods & Services Tax of 3%. From Dhanteras, which was on October 18, gold price corrected by 9% - slipping from a historical high of Rs 1,30,874 per 10 gm. On October 7, the price of gold was at Rs 1,19,941 per 10 gm and since then gold prices started moving northward peaking on Dhanteras, when Indians purchase gold to bring luck and prosperity to the households.
"Since prices have corrected by 9%, volume sales are likely to pick up. Value-wise we have witnessed 20-25% growth this festive season. But volume-wise it is 10% down. Affordability will increase with the price fall. For instance, if someone was buying 30 gm gold, he had to bring it down to 25 gm because of high prices. Now he may think about increasing the volume to 28 gm," said Suvankar Sen, managing director of stock market listed jewellery firm Senco Gold.
Gold prices have fallen below $4000 as the bullion's appeal as a safe-haven diminished with indications of an easing of US-China trade tensions. Market players are now awaiting this week's Federal Reserve interest rate decision.
The US-China trade talks will be keenly monitored for their influence on gold prices. Top Chinese and US economic officials have worked on the terms of a trade agreement on Sunday, which will be decided later this week between US President Donald Trump and his Chinese counterpart Xi Jinping.
Along with gold, silver prices are back to a month-ago level. Retail price of silver on Tuesday was 1,43,400 per kg. Prices dropped by Rs 34,700 per kg from October 14, when it touched the historical high of Rs 1,78,100 per kg.
"If Trump and Xi have a fruitful trade summit this week, gold may find itself somewhat in the dark. If the Fed adopts a dovish stance with this week's anticipated rate decrease, however, this might be countered. Investors are watching for any forward-looking remarks from Fed Chair Jerome Powell, as it is generally anticipated that the Fed will lower interest rates at the conclusion of its policy meeting on Wednesday," explained Renisha Chainani, research head of Mumbai-based Augmont Gold.
"We were expecting a fall in gold prices. But the gold trade had not thought that the correction would be so steep from Dhanteras. Jewellers across the country have started restocking gold in anticipation of better wedding sales. People will now have more money to buy jewellery. Prices have corrected now, and from here it can again go up further. Those who have weddings in the family have started booking gold at this rate so that they do not feel pressure on the pocket in the upcoming wedding season," said Avinash Gupta, vice chairman of All India Gem & Jewellery Domestic Council.
Expectant jewellers have started restocking gold to take advantage of the falling price of the yellow metal keeping in mind the November- March wedding season.
On Tuesday, retail gold was trading at Rs 1,19,164 per 10 gm without a Goods & Services Tax of 3%. From Dhanteras, which was on October 18, gold price corrected by 9% - slipping from a historical high of Rs 1,30,874 per 10 gm. On October 7, the price of gold was at Rs 1,19,941 per 10 gm and since then gold prices started moving northward peaking on Dhanteras, when Indians purchase gold to bring luck and prosperity to the households.
"Since prices have corrected by 9%, volume sales are likely to pick up. Value-wise we have witnessed 20-25% growth this festive season. But volume-wise it is 10% down. Affordability will increase with the price fall. For instance, if someone was buying 30 gm gold, he had to bring it down to 25 gm because of high prices. Now he may think about increasing the volume to 28 gm," said Suvankar Sen, managing director of stock market listed jewellery firm Senco Gold.
Gold prices have fallen below $4000 as the bullion's appeal as a safe-haven diminished with indications of an easing of US-China trade tensions. Market players are now awaiting this week's Federal Reserve interest rate decision.
The US-China trade talks will be keenly monitored for their influence on gold prices. Top Chinese and US economic officials have worked on the terms of a trade agreement on Sunday, which will be decided later this week between US President Donald Trump and his Chinese counterpart Xi Jinping.
Along with gold, silver prices are back to a month-ago level. Retail price of silver on Tuesday was 1,43,400 per kg. Prices dropped by Rs 34,700 per kg from October 14, when it touched the historical high of Rs 1,78,100 per kg.
"If Trump and Xi have a fruitful trade summit this week, gold may find itself somewhat in the dark. If the Fed adopts a dovish stance with this week's anticipated rate decrease, however, this might be countered. Investors are watching for any forward-looking remarks from Fed Chair Jerome Powell, as it is generally anticipated that the Fed will lower interest rates at the conclusion of its policy meeting on Wednesday," explained Renisha Chainani, research head of Mumbai-based Augmont Gold.
"We were expecting a fall in gold prices. But the gold trade had not thought that the correction would be so steep from Dhanteras. Jewellers across the country have started restocking gold in anticipation of better wedding sales. People will now have more money to buy jewellery. Prices have corrected now, and from here it can again go up further. Those who have weddings in the family have started booking gold at this rate so that they do not feel pressure on the pocket in the upcoming wedding season," said Avinash Gupta, vice chairman of All India Gem & Jewellery Domestic Council.
