Gold cheaper: Diwali sale starts already

As falling gold became less lustrous to investors in the past few weeks, retail consumers have started their festival and marriage shopping for the precious metal months in advance.

The gold prices on Tuesday dipped as low as Rs 11,000 per 10 gram, down nearly one-fifth from this year's high of Rs 13,650 scaled nearly a month-ago on July 15.

"The plunge in the gold price has come perfectly in time to ignite demand ahead of Diwali and the wedding season," branded jewellery retailer Gitanjali Gems' Managing Director Mehul Choksi told PTI.

The demand has gone up significantly and we are expecting good sales ahead, Choksi added. Gitanjali sells diamond and gold jewellery under the brands Nakshatra, Asmi, Gili, D'Damas and Sangini.

Echoing similar sentiments, Delhi-based PP Jewellers' Director Pawan Gupta said, "The falling price of the yellow metal is attracting customers. Buying pressure has intensified in the last two days as many are shopping in advance for marriage."

Officials at GMT Jewellery Mart also said that the consumers have started buying heavily amid the falling gold prices.

The price has come close to its level seen during the Diwali season last year, when it stood at near Rs 10,500 per 10 gram. This year, Diwali falls on October 28. 

Traditionally, gold demand peaks in the country during the second half of the year, when a number of religious festivals such as Diwali, Durga Puja, Dhanteras and Raksha Bandhan take place, besides a heavy wedding season.

Industry experts said that speculations about a rebound in the prices in the run-up to Diwali and Dhanteras festivals are also leading to a sudden spurt in the advance buying.

Religare Commodities Business Head Jayant Manglik said, "Now is the time to invest in gold. Some are buying heavily in both spot as well as futures market".

Metal experts attributed the rising dollar against Euro and a declining trend in crude oil, the main reason for the fall.

Gold tumbled to its weakest in eight months in volatile trade, losing its safe haven appeal as investors shifted some of their money back into the dollar and oil further retreated from record highs, they said.