Thursday, December 12, 2024
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Thursday, December 12, 2024
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Indian Consumers Embrace Gold Amidst Skyrocketing Prices This Festive Season

According to industry experts who spoke to Reuters, Indian gold buyers dismissed record high prices and began buying for the Dhanteras and Diwali festivals on Tuesday in the hopes that bullion would continue to rise and yield encouraging returns despite a cooling stock market.

Strong demand in the second-largest gold consumer in the world may help sustain global prices, which last week reached all-time highs. Growing demand for gold imports may potentially strain the rupee and increase India’s trade deficit.

“People are still into gold big time, even with prices at record highs during Dhanteras. With gold giving better returns than the stock market, there’s been solid demand for coins and bars,” said Saurabh Gadgil, chairman of PNG Jewellers.

Tuesday was Dhanteras, one of the busiest days for gold purchases in India and a day that is considered auspicious for gold purchases.

Last week, local gold prices surged to a record high of 78,919 rupees per 10 grammes, up more than 31% since Diwali the previous year. The NSE Nifty 50 share index in India has fallen almost 7% after reaching a new high on September 27.

According to Gadgil, investors are trying to increase or diversify their holdings in gold and silver in order to diversify their portfolios.

“In value terms, turnover during this year’s Dhanteras is expected to be significantly higher than last year due to higher prices. In volume terms, it may be slightly lower or around the same level as last year,” Prithviraj Kothari, president of the India Bullion and Jewellers Association (IBJA), said.

After last week’s $4 reduction, Indian dealers on Tuesday charged up to $1 an ounce more than official domestic rates, including 6% import and 3% sales taxes. Last week, the price of local silver futures reached a record high of 100,081 rupees per kilogramme.

“Demand for silver coins and bars was strong today, as silver has delivered better returns than gold in recent months,” said Chirag Thakkar, CEO of Amrapali Group Gujarat, a leading silver importer.

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