Prices fall but no gold rush yet

HYDERABAD: The sudden dip in gold prices over the past two days might have drawn in large numbers in the first wave but it has not translated into notable increase in sales as customers are holding out in the hope that the markets will blink, more than once. “Though we are here to purchase gold for our son’s wedding, we are postponing the purchase on the assumption that the prices will fall further,” says K Srinivasachari, a retired state government employee, who was visiting a gold retail store with his family. There are others who subscribe to his point of view. “The fall in prices has meant that I can buy something better for my daughter’s wedding than I could have afforded earlier. But I am crossing my fingers and waiting for the festive season when it would fetch me more for my budget,” chips in Punita, a homemaker.The precious metal which was riding high till recently is bound to become affordable over the next few weeks - “There is bound to be a correction in the value of gold at the onset of festive season. Further, the hedge money invested in gold will be released and the supply of gold will increase in the market. It translates into more value for the cutomers if they can wait for some time,” says K Siva Shanker, chief strategist at Efforts Capital. Jewellers across the city have not recorded windfall sales when the numbers took a beating, but seem sure of better sales during the festive season. “Since it is not an auspicious time to buy gold due to Shradhha Amavasya, the footfall has been low though the first day of reduced prices brought in a good response. Buying for the festive season will pick up on the run up to Dusshehra,” explains R Arati, assistant manager at Meena Jewellers in Punjagutta. The family tradition of investing in gold during the festive season is likely to continue. “After the Dusshehra and Deepavali bonuses are issued the response to the price fluctuations can be felt. Till then, we have regular customers visiting us,” says Naimish Mehta of GRT Jewellers.Those raring to venture on a jewellery shopping spree need to be cautiously bullish, advises Shiva Shanker. “Gold coins and bullions, as well as demat form of gold and gold exchange traded funds (ETF) are a good investment for their complete valuation. However, Indian customers prefer physical gold as it is still a family culture to invest in the precious metal. For the time being waiting for a week may bring in better returns.”