Jewelers say retail demand for gold as an investment has dropped 15% in the past 10 days amid a sudden spike in the yellow metal’s price.
With prices rising by nearly ₹1,500 to ₹54,260 per 10 gm, those accumulating gold in the form of coins and bars are hesitant to buy the metal, they said.
“Gold has rallied strongly in price action, rallying nearly $60 an ounce in the past two weeks alone to trade around $1,800,” said. Colin ShahKama’s MD is based in Mumbai Jewelry, attributed the price increase largely to the US Fed’s dovish comment on their monetary policy. Looking ahead to December, the precious metal looks set to extend its recent gains, driven by a combination of weaker inflation, weaker economic data and the possibility of the Fed raising rates by another 50 basis points, he said. on December 14”.
According to Shah, $1850/troy ounce appears to be a technical level the metal can hit by the end of December, with interest rates forecast to continue to rise next year to keep investors cautious. “We expect the metal to fall by a small margin in mid-December around the Fed announcement.”
Demand for coins and bars in the first nine months of 2022 stood at 117.1 tonnes, 8.83% higher than a year earlier. “The volatility in gold prices will continue until January,” said Suvankar Sen, CEO of Kolkata-based Senco Gold & Diamonds.
Meanwhile, investment managers say it is prudent to invest in gold as the price is still a long way from the all-time high reached earlier this year.
