Gold, silver prices still up; buyers go for purity

New Delhi, Oct 8 (IANS) Gold and silver prices continue to be steep but there has been a marked preference among buyers for hallmarked products that guarantee purity.

Sunday, October 8, 2006 | 1:07:55 PM IST (+05:30 GMT)
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New Delhi, Oct 8 (IANS) Gold and silver prices continue to be steep but there has been a marked preference among buyers for hallmarked products that guarantee purity.

Sanjiv Batra, chairman and managing director of MMTC Ltd, said that the high prices of the two metals had led to some incidences of impurities being found. The state-run company has carved a niche for itself with hallmarking of silver and gold.

The MMTC, which handles the melting of silver articles, had found that several of the silver offerings made by devotees at the Vaishno Devi shrine in Jammu contained impurities.

Batra told IANS: 'Since the prices of gold and silver continue to remain at higher levels than last year, there is more incentive for impurities (in silver articles) as recent sample checks by the Bureau of Indian Standards (BIS) have found.

'Adulteration is not restricted to gold articles but also silverware. We found that silver offerings at the Vaisho Devi shrine contain 50-55 percent impurity.

'The steep price of gold has seen a 50-60 percent rise in demand for our value added hallmarked products.'

The MMTC hopes to see huge sales at its annual week-long Festival of Gold here beginning Monday given the fall in gold prices by around 16 percent - to Rs.8,800 in mid-September from a high of Rs.10,140 per 10 gm in May.

Having forecast a further rise in gold prices coupled with the attraction of MMTC's wide array of traditional and modern designs from all over India, the industry is expected to give a fillip to investors.

MMTC, the largest international trading company of India, is a major bullion trader handling 20-25 percent of the country's annual gold imports.

Of the 193 tonnes of gold imported by India in April-September or the first half of 2006-07 fiscal, MMTC's share was 36.7 tonnes. The global trade of gold was 780 tonnes during the same period.

MMTC has in recent years been trying to create a niche for itself through value-added hallmarked gold medallions and jewellery and 'Sanchi' silverware.

Precious metals trade contributes over 50 percent of MMTC's turnover, which is set to witness a sizeable growth this year.

'The turnover for the first half of the year from April-September has crossed Rs.112 billion as against Rs.80 billion during the corresponding period last year - a growth of over 35 percent,' said Batra.

MMTC's turnover during 2005-06 fiscal was Rs.163 billion.

'Our medium term growth strategy includes joining hands with banks and franchisees to sell bullion through our network and opening more retail outlets in major cities using MMTC's brand name,' said Batra.

Three more retail outlets are planned in 2006-07 -- at Ahmedabad, Bangalore and Hyderabad.

'We share the view that gold and silver hallmarking should be made mandatory. But that may not be possible as setting up one hallmarking centre costs around Rs.15 million. We plan to open shortly two more hallmarking centers, in Kolkata and Ahmedabad. These will also be retail outlets for hallmarked products,' said Batra.

By 2010, MMTC hopes to have 16 hallmarking centres to cater to industry and consumers. Also in the offing are plans to raise the number of MMTC<

Copyright : Indo-Asian News Service
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