Published On : Tue, Apr 16th, 2013

Gold price crash lifts buyers’ mood in Nagpur

Nagpur News:

With the gold prices spiralling down to new low, registering straight crash for the third successive trading session, buyer’s sentiment has been fueled once again. On Tuesday the gold plunged by Rs 1,160 per ten gms making it the best buying time for the customers eyeing on upcoming marriage season in Nagpur. Though the steep fall in gold prices increased the difference in prices to substantial level, the jewellers in the city are busy cashing on to the current fall.

Since gold purchase is done on share trading, the jewellers too are not at loss as they do not have to pile up stocks but purchase on the same day in the form of shares.

The retail jewellery market in the city is flooded with buyers marking the sharp surge in the overall sale of yellow metal. Before the crash cycle began three days back, gold prices stood somewhere around Rs 28,500 per ten gms in Nagpur. With the third steep fall in succession, the yellow metal traded at Rs 26,700 per ten gms in the city on Tuesday.

With such fluctuating trend in the rates of this traditional metal, one of the questions that is rising in most minds is that is this mode of investment still as safe as it has been till now?

However, the Nagpur Market doesn’t seem to be affected any differently from outside market, since it is the in central India, as per the survey. Infact, Nagpur being a big market is witnessing appreciable sales. Various Jewellers from Nagpur say that there is an significant growth in the sales of gold, and as a matter of fact, silver as well. They also say that Nagpur business is somewhere constant. If the market prices have fallen, they have to increase gradually anyways, the reason for this being, that the cost of production of gold is too high. A gram of gold is produced out of three tons of sand.

Kishor Sheth, Director, Batukbhai Sons Jewellers shared his views saying, “I feel people should not sell their shares of gold, rather they should wait for the market to grow again. Last year, as on 31st March, 2012, the gold rate per 10 grams was Rs. 27860. The rates now in April have become nearly the same as last year. Gold trend will increase for sure, that too with high pace.”

Nilesh Kothari, Director, Karan Kothari Jewellers said, “The growth has coped up now, because of this change in the market! Volatility was seen on Saturday and Monday, but the market has become consistent now from today. This is the time when people are coming up to buy this commodity. This recession is not long term. The downfall in market has not only affected gold, but other commodities as well. The people who know and understand the market trends will definitely still trust gold as the safest mode of investment, in spite of such fluctuating rates.”

Hemant Zaveri, Director, TBZ Jwellers voiced similar views saying, “There is a temporary change in the buying process. But people should still trust the yellow metal and invest in it, but smartly. Don’t put all your eggs in one basket I’ll say.”

Gold prices have lost a whopping Rs 3,160 per 10 grams in the last three trading sessions nationally. The precious metal is cheaper by 25 percent or Rs 6,535 per 10 gram, compared to November 27, 2012, level when the rates had touched the all-time high of Rs 32,975.

While Tuesday’s fall of Rs 1,160 in Delhi bullion was the steepest among the four metros, in Mumbai it fell by Rs 650 to Rs 26,040, in Chennai by Rs 725 to 26,105 and in Kolkata by Rs 665 to Rs 26,945. Traders attributed the fall in prices to particularly weak global cues.

In the global market, gold plunged 9.35 percent to USD 1,360.60 an ounce at the New York exchange. The metal has dropped by USD 200 an ounce, or nearly 13 percent, in the last two trading days.