Festive spirit yet to spark gold sales

Contrary to wide expectations, this festival season so far has not seen any huge demand for gold. Traders and analysts, however, expect it to pick up before Diwali and continue through the next marriage season.

"Sales have gone up, say 20-25 per cent, during this Navratras but it is nothing significant compared to the sales around this time last year," a Delhi-based gold trader said.

Traders attributed slackening in demand to volatile prices which have been swinging in the range of an all-time high of Rs 13,670 per 10 gram and a low Rs 11,800 per 10 gram during the last few months.

Gold is trading at Rs 13,400 in Delhi bullion market.

"The spark in demand for gold has not been that dramatic this season. The main reason behind the slow pick-up in demand is the volatile price movement," said Suresh Verma of Delhi-based Om Jewellers. "Consumers are hesitant and are keeping a wait-and-watch policy, expecting the prices to go down further," he added.

World Gold Council Director Dharmesh Sodah said as the gold prices are in a declining mode, it should have a positive impact on sales. "People who were holding back during the first half of the year will buy now," he noted. "There is a pick-up in demand during the Navratras, a positive sign, and we expect the demand to increase considerably by Diwali and sustain throughout the marriage season," he said.

Last year, during the first half, gold sales were very good compared with the second half, Sodah explained. He said, "This year the first half was slow as purchases were held back due to high prices. However, we expect the purchases to materialise during the second half."

Gold prices today saw an increase of about Rs 520 to Rs 13,400 per 10 grams due to a firm global trend.