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Gold’s Festive Glitter

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Gold’s Festive Glitter
Yagnesh Kansara - 06 October 2020

What are the reasons behind the sudden spurt in gold and silver prices?

The domestic gold price is always influenced by the international price movement. The international gold price has gone up because of geo-political tensions, Covid-19 pandemic, devaluation of dollar, investors’ inflow. And, the prevailing economic uncertainties have also enhanced the safe-haven value of gold among investors. All these reasons have contributed to the rise in gold prices. On the other hand, the rebound of industrial demand has increased silver prices.

How far will it go? Will it affect the retail jewellers’ demand during the festive season?

It’s very difficult to predict the price movement at the moment. However, due to the prevailing economic scenario, the gold price will remain on the higher side. The gold price rise will have a short-term impact on jewellery demand. In the long run, the buyers will come to terms with the new normal pricing.

How have your sales been in the last six months?

Due to the pandemic and the subsequent lockdown, jewellery stores across the country were shut down. So, jewellery retail, which is majorly touch-and-feel and relationship-driven, has been severely impacted. During the unlocking process, the sales are gradually reviving, as we are opening stores, following the guidelines. But, it is yet to reach the pre-Covid level.

Do you advise your retail clients to buy gold and silver at this price level?

Anytime is a good time for investing in gold. In this scenario, investing in gold jewellery will protect investors’ capital. Buying gold is the best hedge against economic uncertainties and upward gold price movement.

yagnesh@outlookindia.com

 

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