#TrendingNow: Gold Price Drops Fuelling Fresh Demand During Festive Season
Dussehra is just around the corner while Dhanteras and Diwali aren’t that far away. This is the time when consumers indulge in buying jewellery. With gold prices recording a six-month low, there could be a fresh demand for jewelleries.
According to industry experts and market analysts, gold prices are expected to stay low till the end of December with the US Federal Reserve hiking interest rates by 75 bps (basis points) on 21 September 2022.
What is the Current Price of Gold?
The price of 22-carat gold fell to Rs.45,800 per 10 grams on 21 September. However, there was a slight increase in price the next day. During Akshay Tritiya, an occasion considered to be auspicious to buy gold, the price hovered around Rs.48,000 per gram.
The hawkish stance of the US Federal Reserve has affected gold rates with the precious metal witnessing a price dip of 1% on 22 September 2022.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.12% to 952.16 tonnes on Wednesday from 953.32 tonnes on Tuesday, according to a report published by Economic Times.
What does Gold Price Drop Mean for Jewellery Sales?
Industry experts are of the opinion that the dip in gold prices, especially when Navarathri, Diwali and Dhanteras are knocking at the door, would boost gold sales. Experts are suggesting that even if there’s a hike in gold price, it would be marginal – maybe around Rs.400 to Rs.500.
Also, with the wedding season around the corner, there has been substantial advance booking of gold jewellery to hedge against a possible gold rate hike in the future.
Consumers are keeping a close eye on gold rates and paying 10% in advance to book jewellery, B Govindan of Bhima Jewellers told Moneycontrol. Jewellery store walk-ins have increased by 40%, he further added. Additionally, buying new gold ornaments in exchange for old ones has also increased. However, the quantity of gold purchased is still below pre-COVID levels.
Final Word
So, are you planning to book gold jewellery in advance as well? With the price drop, buying gold, especially during the festive season, looks like a lucrative deal. We would love to hear your opinion in the comment section.
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