New Delhi, Sep 28 (IANS) The festival spirit has brought joy in the Indian gold market as current low prices coupled with a forecast of new highs by the year-end have propelled sales.
After a fortnight of slide to briefly touch $574 per troy ounce, bullion prices have scaled up again to $593.50 per troy ounce.
Buyers returned to shop for the Hindu festival of Diwali and the wedding season even during the shraddha period - a fortnight during which people pray for their ancestors and avoid auspicious activities including buying gold - as the prices touched a low of Rs.8,700 per 10 grams, All Delhi Jewellers Association general secretary Rakesh Saraf told IANS.
Market observers say that Indian buyers have come to accept the fact that the time when gold was available for about Rs.5,000 for 10 grams is over and are ready to make a beeline for gold purchase when prices dip, as they did during the shraddha period that ended Sep 22.
With prices on the rise again to reach Rs.9,000 per 10 grams of pure gold, the demand is mostly for gold bars, with even small investors seeking to buy 50-100 grams in anticipation of gold scaling past earlier high levels of over Rs.10,000 per 10 grams.
In the case of jewellery, the pent-up demand and weddings in offing are leading to good purchases.
Bridal jewellery sales have picked up significantly with people buying up now even for weddings scheduled for March next year in anticipation of a further price rise.
While jewellery is available in plenty, the same cannot be said for gold bars.
Market sources report that major bullion importers like State Bank of India, Bank of Nova Scotia, HSBC and ICICI have overbooked supplies to such an extent that the stock is sold out as soon as it arrives with large pending orders for gold bars.
'It is in fact a tight-rope situation since a gold shortage at this time in India - the biggest market in the world - can push up global bullion prices,' said Saraf.
'The glitter is back in the market with prices still below high levels seen earlier this year. As far as the wedding season demand is concerned, the heavy traditional jewellery remains the first choice,' said G.S. Pillai, president of Aerens Infrastructure and Tech Ltd, which has set up the first Gold Souk in the country.
The Gold Souk in Gurgaon, near the national capital, is seeing good business with the branded jewellery section a major draw particularly for the youngsters, who are making a beeline for lightweight and branded products, according to Pillai.
'After a long time real buyers are back in the market alongside investors who are keen to cash in on the lower prices to buy more gold bars. While upper class customers are seeking diamond-studded jewellery, gold jewellery is the first choice for average buyers,' said Pawan Gupta of PP Jewellers, a major retailer and exporter.
Predicting that gold was set to scale over Rs.10,000 before Diwali, falling on Oct 21, Gupta said the outlook for exports, especially to the Middle East, the US and Britain, was very good ahead of the festival season.
PP Jewellers expects to double its gold jewellery exports this year to Rs.3 billion.
'Gold business is looking up again as the appetite for gold jewellery has become robust after a long gap,' said Mike All