Glitter is back this Akshaya Tritiya, says World Gold Council India head

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April 28, 2017

Lower domestic prices, pent-up demand boost buying post-demonetisation

New Delhi – People have returned to the gold market this year on the occasion of Akshaya Tritiya, making token purchases and even wedding-related gold purchases, according to the World Gold Council (WGC).

April 28, 2017

Lower domestic prices, pent-up demand boost buying post-demonetisation

New Delhi – People have returned to the gold market this year on the occasion of Akshaya Tritiya, making token purchases and even wedding-related gold purchases, according to the World Gold Council (WGC).

The response this year was more positive than last year when Akshaya Tritiya came under the shadow of an excise protest, PR Somasundaram, Managing Director India, WGC, told BusinessLine on Friday.

“There is positive sentiment. Enthusiasm and optimism is back. Consumers are back this year and trade is positive”, Somasundaram said, adding that “last year the excise duty strike had affected the response. Quite a few had not even returned for Akshaya Tritiya.”

More transparency

He said trade has almost already adjusted to PAN requirements and they are now preparing for the Goods and Services Tax (GST).

“The entire market is moving towards transparency and there is general acceptance on ‘this is the way to go’, he said.

P.R. Somasundaram

Somasundaram said two factors were in favour of the return of consumers to the gold market on the occasion of Akshaya Tritiya. One is that international prices have gone up 8.5 per cent since the beginning of this year. Also, Indian prices are up 2.5 per cent. This 6 percentage gap is a good incentive for investment and to enjoy the margin of safety, he said.

The second factor is demonetization. The latent demand is getting released. People who could not buy in November or December after harvest are finding an occasion to come back, he said.

In addition, stock markets are doing well now, adding to the positive sentiment for gold, especially among people with low-risk appetite. Entering at this current level in stock markets may be a big ask for those with low-risk appetite and would prefer gold as preferred asset class this season, Somasundaram noted. “This adds to the glitter of gold this season,” he said.


Courtesy: The Hindu – Business Line

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