Gold Makes Glittering Comeback
By Amrita Nair-Ghaswalla (India)
Gold is enjoying a
modern-day renaissance in the country. From
retail sales of 300-400 kgs of gold bar per day
at the start of 2008, demand has surged to 3,000
to 4,000 kgs per day.
Barring the slight rise in price at the start of
this week, most counters registered an
unprecedented sale. Gold's dip below Rs 12,000
per 10 grams early this month has sparked off
widespread buying. From a high of Rs 13,900 for
10 grams around a month and half ago, the price
of the yellow metal slipped to Rs 11,850 on
Wednesday, ensuring droves of customers.
The demand for the metal has skyrocketed to such
an extent that imports for the month of August
alone are set to cross 100 tonne. Last August,
the country imported 69 tonne of gold.
"Ten days ago, the price was Rs 11,300 and
retail outlets recorded consumer demand many
times higher than that witnessed during 'Dhanteras',
the first day of Diwali, or 'Akshaya Tritiya',
when buying gold is considered auspicious," said
Suresh Hundia of the Bombay Bullion Association.
India, the world's biggest buyer of bullion, is
also set to increase its gold imports for the
first time in nearly 12 months, analysts told
TOI. Given that the first half of 2008 saw
volatile gold prices driving down demand, the
last few weeks have witnessed a sudden rush of
The country imported 750 tonne of the yellow
metal in 2006. This dropped to 449 tonne in
2007, as a consequence of the rise in price.
Traders who spoke to TOI said India imported 122
tonne between January to July 2008. The
corresponding period of 2007 saw 269 tonne of
the metal coming into the country.
Incidentally, the rise in demand is being
attributed by traders to the next festival after
'Raksha Bandhan', which is Ganesh Chaturthi,
which falls on September 3. Traders maintain
that many consumers, particularly in South
India, normally buy idols or jewellery in gold
to bedeck their favourite God and the rush to
retail stores ensures that the line-up to the
festival has already started.
Gold generally moves in tandem with crude oil as
the latter signals inflation. The fall in price
in the international market has ensured a slump