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Covid-related restrictions have affected retail demand as some of the biggest markets like Mumbai and Delhi are under complete lockdown
Surge in Covid cases and increasing lockdown restrictions in various parts of the country have led bullion traders to offer discounts to jewellers over official domestic prices.
Covid-related restrictions have impacted retail demand as some of the biggest markets like Mumbai and Delhi are under complete lockdown. Most jewellery houses are either closed or have been witnessing negligible footfalls due to surge in cases currently.
“Bullion dealers are offering a discount of $2 – $3 an ounce over official domestic prices, inclusive of 10.75% import and 3% sales levies,” said Anuj Gupta, VP, Commodity and Currency Research at IIFL Securities.
This has been done on the back of jewellers not buying from bullion dealers. Jewellers buy from bullion dealers to maintain their stock, however due to the low demand currently from the bigger gold markets, such discounts are being extended to jewellery makers.
In the spot market, 24 karat gold was sold at Rs 46,791 per 10 grams while silver was priced at Rs 67,800 per kilogram on April 30, according to the Indian Bullion and Jewellers Association.
Gold prices had hit a two-month high of Rs 48,400 last week , but since then gold has been consolidating, tracking a decline in global rates.
On May 3, gold futures on MCX were trading up 0.49% or Rs 231 at Rs 46,968 per 10 grams. Silver futures rose 0.57% or Rs 392 to Rs 68,758 per kg.
If you are to buy spot gold today, for 10 grams of 22-carat gold in the national capital, the price you’ll need to pay is Rs 43,800, while for 24-carat gold of 10 grams, the cost is Rs 49,540.
Spectre of second lockdown
The World Gold Council in its latest report too has said that the gold demand prospects for Q2 in India are less certain as fresh lockdowns attempt to deal with the second wave of COVID-19 currently affecting the nation.
Experts suggest that investors can buy gold on any dips as prices may further rise going forward.
Anuj Gupta is looking at the short term targets of Gold prices touching Rs 47,300 on MCX and Silver touching Rs 70,000.
Also, since Akshay Tritiya and Eid are approaching around mid May, jewellers are coming out with offers to attract customers.
Jewellery major Tanishq is offering up to 25% off on making charges of gold and diamond jewellery and Caratlane is offering flat 20% on diamond jewellery to attract customers in the subdued demand scenario,