Trade circles explain that normally business slows down in July every year, in view of the vacation in the USA, to be followed by holidays in Europe till mid-August.
Polished Prices Soften :
In view of the present slowdown in business activity, prices of polished gems have in general softened by 2-3 per cent. This softness is particularly visible in certified goods. Piques which are, however, in short supply remain steady.
Rough Gemstones Somewhat Easy :
The market for rough gemstones is also easy with quotations for most varieties come down by 3-4 per cent from the recent elevated levels.
Manufacturing Activity Subdued :
Currently manufacturing activity, on the whole, is lower than normal, because of two factors. Shortage and high prices of rough have been responsible for some reduction in manufacturing activity. Besides, most factories are facing the problem of shortage of workers. Many of them, who were sent away by their employers last year when recession was severe, have not returned. It is possible that they might have got jobs elsewhere. Moreover, even those who are working are threatening to go on strike at some manufacturing centres, such as Ahmedabad, unless their wages are raised.
Problems in China Too :
It might be interesting to note that the industry in China is also facing similar problems. Workers in most cases have, however, been able to get hikes in their wages. While the manufacturers fear that such wage hikes might make them uncompetitive. Overall demand was reported to be down there by 20-25 per cent. It was feared that prices of polished gems might come down by 5-7 per cent, if the present slowdown continued for some more time. The jewellery manufacturing industry in China is currently working at reduced capacity.
IMF’s Optimistic Predictions :
While markets in the USA and Europe remain subdued at present those in the Middle East and some in the Far East remain active. This helps the market in sustaining its optimism. To add to this, the International Monetary Fund (IMF) has predicted that the global economic growth rate might rise to around 4-6 per cent in 2010, against (-) 0.6 per cent in the earlier year. It has also visualized economic growth rate of 3.3 per cent for the USA in 2010, compared with (-) 2.4 per cent in the previous year. This raises considerable hope for further revival of the industry.
Polished Diamonds – Despatches Up :
Despatches of cut & polished diamonds from India sustained their uptrend, as can be seen from shipments from Mumbai which were despatched by July 17, 2010. According to these statistics, shipments of cut and polished diamonds from Mumbai in the first three months (April to June) of 2010-11 totalled US$ 3424.77 million, compared with US$ 1950.43 million in the same period of the preceding year.
Gold Jewellery Upbeat:
Likewise dispatches of gold jewellery from Mumbai were upbeat in the April-June quarter of 2010-11 amounting to US$ 178.36 million, compared with US$ 93.85 million in the same quarter of the preceding year.
Rough Diamond Imports Up :
Imports of rough diamonds to Mumbai in the first quarter of 2010-11 were of the order of US$ 1,040.68 million compared with US$ 739.02 million in the same period of the preceding year.
Bullion Upswing :
In the market for bullion, gold seemed to be facing some bull liquidation as could be seen from the fact that on July 15, 2010 it was quoted in London around US$ 1215.4 per ounce, against US$ 1223.65 per ounce, a month ago. Silver, however, was firm around US$ 18.48 per ounce, against US$ 18.31 per ounce a month ago.
In the domestic market, standard gold was traded on July 15, 2010 around Rs. 18440.00 per 10 grammes while silver was placed around Rs. 29705 per kg. The domestic market, by and large, followed the signals from abroad.
In the overseas market, platinum was quoted at US$ 1518.50 per ounce and palladium around US$ 458.80 per ounce.