arrh, bubble? i think not., page-5

Article in times of India:


Gold costlier, but no dip in demand


Dileep Athavale, TNN | Sep 9, 2012, 02.23AM IST
PUNE: Gold never loses its sheen. And if the unabated consumer appetite for the yellow metal is not a proof of this, what could be?

The price of the coveted commodity has surpassed the mark of Rs 32,000 for 10 grams in the New Delhi market, setting a new historical high. The city market, however, remained more or less cool to this rise as buying has been going on almost as usual.

City-based jewellers TOI spoke to said gold prices may rise further on both global signs and sustained domestic demand. "Price of gold - which is dollar-based - has gone up steeply as the rupee-dollar exchange rate is high. The price rise is not in response to jump in domestic demand," said Saurabh Gadgil, director, PNG Jewellers. He said given the importance of gold in India's social life, the demand for it is not elastic. There are occasions such as weddings when people buy gold whatever the price, he added.



Gadgil said the market did not demonstrate any resistance when the price of gold crossed the level of Rs 30,000 per 10 grams and one has to watch out for the next benchmark of Rs 35,000 per 10 grams. "It is, however, unlikely that there will be a fall in gold price. In fact, buying will go up as the festivals and wedding season gets closer," he said, adding that the price may jump to Rs 38,000 before the end of the year. "Though gold prices have been rising steadily over the last few months, quantities we sell are also increasing."

Fattechand Ranka of Ranka Jewellers sounded cautious, saying that there may be a slight fall in the retail gold and jeweller sales as the market usually sits back and absorbs the steep price rise. "Each year, we have a busy time between Navaratri and February-March. This time round, however, I am keeping my fingers crossed and would watch the Navaratri season closely. If the sales remain stable during that time, then the entire season may be good," he said.