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Price swings keep consumers away from gold
Monday, 05 May 2003, 19:30 IST
NEW DELHI: Bullion speculators may be making hay, but price sensitive Indian consumers are keeping away from the gold market with very few weddings in the offing to push up buying sentiments.
In the week gone by, bullion prices continued its wild swings, scaling up from $333 per troy ounce at the start of the week to end at $340.70 per troy ounce Friday after going to higher levels.
The Indian market, the biggest importer and consumer of gold, has been keeping pace with global trends that experts forecast will continue to be volatile in the days ahead before settling down at lower levels than the current price of around 
5,350 per 10 grams of 24 carat gold.
"After some good demand in the wedding season during April, the market is once again going through a low phase as prices have scaled up to higher levels since the end of Iraq war," G.S. Pillai, president of Aerens Gold Souk International, told IANS.
"The demand was pushed up to some extent last month when the prices softened because of the vacuum created by high prices and low demand in the early part of the year."
Pillai shares the optimism of other market experts that the high price trend will not continue for too long. But no one is willing to forecast when the prices will soften again.
"While India is influenced by global trends that to some extent impact when going through a slow demand phase, it does not have much bearing when the demand is high as was seen last month," said Pillai.
With very few auspicious wedding dates left in May, the gold market does not see much demand to boost buying sentiments.
Bullion traders are, however, hopeful that the price trend will stabilise at lower levels and build up sales.
"It was expected that once the Iraq war was over, bullion prices would soften. But the continuing uncertainty on Iraq, the weakening of the dollar, combined with high speculations by international traders has pushed up international prices," said Krishan Goyal, general secretary of Delhi Bullion Merchants Association.
"It is unlikely that prices will settle down in the near future. It may eventually soften after going up to higher levels."
Pawan Gupta, director of PP Jewellers, one of the largest manufacturers, retailers and exporters of gold jewellery, said the gap between a dip and a rise in gold prices is not sufficient for consumers to take advantage.
"If the gap was at least a week between the dip and rise in prices, we could expect consumers to take advantage," Gupta said.
"Now there are more people in the market to sell when the prices go up than general consumers wanting to buy new articles of jewellery. After the main marriage season in April there has not been much demand this year."
Gupta foresees the prices scaling well past $350 per ounce in the coming weeks before settling at lower levels.
He said it was not just the domestic market but also the international market that was reacting adversely to high prices.
Last year, PP Jewellers witnessed no increase in its annual exports of around 1 billion, which is mainly to the U.S and Britain. Growth this year too will depend on volatility of the yellow metal.
Source: IANS
5,350 per 10 grams of 24 carat gold.
"After some good demand in the wedding season during April, the market is once again going through a low phase as prices have scaled up to higher levels since the end of Iraq war," G.S. Pillai, president of Aerens Gold Souk International, told IANS.
"The demand was pushed up to some extent last month when the prices softened because of the vacuum created by high prices and low demand in the early part of the year."
Pillai shares the optimism of other market experts that the high price trend will not continue for too long. But no one is willing to forecast when the prices will soften again.
"While India is influenced by global trends that to some extent impact when going through a slow demand phase, it does not have much bearing when the demand is high as was seen last month," said Pillai.
With very few auspicious wedding dates left in May, the gold market does not see much demand to boost buying sentiments.
Bullion traders are, however, hopeful that the price trend will stabilise at lower levels and build up sales.
"It was expected that once the Iraq war was over, bullion prices would soften. But the continuing uncertainty on Iraq, the weakening of the dollar, combined with high speculations by international traders has pushed up international prices," said Krishan Goyal, general secretary of Delhi Bullion Merchants Association.
"It is unlikely that prices will settle down in the near future. It may eventually soften after going up to higher levels."
Pawan Gupta, director of PP Jewellers, one of the largest manufacturers, retailers and exporters of gold jewellery, said the gap between a dip and a rise in gold prices is not sufficient for consumers to take advantage.
"If the gap was at least a week between the dip and rise in prices, we could expect consumers to take advantage," Gupta said.
"Now there are more people in the market to sell when the prices go up than general consumers wanting to buy new articles of jewellery. After the main marriage season in April there has not been much demand this year."
Gupta foresees the prices scaling well past $350 per ounce in the coming weeks before settling at lower levels.
He said it was not just the domestic market but also the international market that was reacting adversely to high prices.
Last year, PP Jewellers witnessed no increase in its annual exports of around 1 billion, which is mainly to the U.S and Britain. Growth this year too will depend on volatility of the yellow metal.
Source: IANS