The gem and jewelley industry is worried about a lowered demand for gold jewellery in the forthcoming season, liquidity crunch, bank’s financial assistance, owing to the fall in gold prices. The prices fell to Rs. 24,700 per 10 grams from Rs.34,000 per 10 grams in last nine months. Analysts predict the fall to continue to the point of Rs.23,500 per 10 grams.
With this, jewellers are not very positive about the outcome of sales. Jewellers expect gold jewellery demand to fall by around 40 percent, this season, reports say.
Also, banks are re-looking at lending with gold deposits and some are reducing their offering per gram. Although, private sector banks and gold loan companies are not being very narrow in their lending, as per reports, and are offering up to the maximum amount permitted by the RBI.
In the international markets, yesterday, gold touched $1,095 an ounce after staying at $1,100 an ounce for a day, reports say. In India, on Thursday, gold was at Rs 25,350 per 10 grams. It traded at Rs 25,050 per 10 grams today, reports say.
Reports suggest that the reduced prices may not induce buyers to shop for gold jewellery, as they await for a further drop. Also, rural demand this year would be affected owing to the slackened monsoons. The imposition of a ruling by the Indian government making it mandatory to have a PAN card upon purchasing jewellery beyond a certain value would deter consumers.