Though gold prices snapped three sessions of gains, the yellow metal failed to cheer the buyers on Akshaya Tritiya day, which is considered an auspicious day. Retail sales of the precious metal were down considerably due to a number of reasons. One of the main reasons for the lackluster sales was the significant increase in prices from the previous year period apart from the introduction of the Goods and Services Tax (GST).
According to Rakesh Shetty, President of Mumbai Jewelers Federation, poor sentiments were due to global political developments such as the West Asia crisis and the significant increase in the yellow metal prices. As a result, customers have resorted to making a symbolic investment in the precious metal on the auspicious occasion, ET reported. Normally, even the commercial banks promote gold on the occasion of Akshaya Tritiya to take advantage of the people’s sentiments. He believes that there is nothing to cheer since the outlook is also not bright.
The auspicious day is believed to bring in success and good luck to people. Therefore, a number of retailers and customers schedule their new ventures to that date. This is not restricted to the yellow metal alone though people throng it since it is not an easy commodity to buy at will at any point in time. There is a strong belief that buying the precious metal will increase the power of buying in one’s career.
The gold prices were traded approximately Rs.28,000 per ten grams in the last year. In the current year, the price has increased to Rs.32,000 per ten grams. As a result, customers were not ready to buy gold in medium or large numbers while some of them were not even ready to shop for it. However, World Gold Council’s MD for India, P.R. Somasundaram, expressed his optimism and termed the bullion market as a stable one after the re-monetization of the economy.
He pointed out that there was a significant improvement in compliance after the transition towards the GST. Therefore, he was confident of the yellow metal attracting positive sentiments. Somasundaram thinks that the digital form of buying and seasonal wedding demand would help sustain growth in the current year from the previous year. He also pointed out the government’s proposal to establish a comprehensive gold policy to treat it as an asset class. This is in line with the industry’s move to improve the credibility.
Drop In Prices
On Wednesday, gold prices dropped following three consecutive sessions of gains. This was due to an upbeat economic data announcement by the United States and its Greenback holding on to its gains. Spot gold price fell 0.3 percent to $1,343.31 an ounce in the afternoon. Similarly, gold futures for June delivery for the United States fell 0.2 percent to $1,346.30.
Following the increased tensions about America’s sanctions on Russia and Syria, gold prices increased to $1,365.23 an ounce last week. This was the highest price after January 25. The fall in yellow metal price is also attributed to investors booking profit from the recent peak levels.