Diwali 2017: Gold Price in India Below Rs 30,000, Sales Gain Momentum Ahead of Dhanteras

India.com Business Desk
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Dhanteras 2017: Gold Sales Drop by 30% This Diwali Season, Diamond Jewellery Sales on a Rise

The demand of gold and silver jewellery sales remained flat this Dhanteras amid sluggish demand from consumers despite relaxation in KYC norms for purchase.

New Delhi, October 16: With the festival of lights just around the corner, jewellery shop owners across the nation have started witnessing unprecendented rush. The sales have gone up ahead of Dhanteras, which falls on October 17, two days before Diwali.  The sales are believed to have quadrupled during the festive season. Most Indians purchase bullion on Akshay Tritiya and Dhanteras, the festivals that are linked to farming cycles and symbolising prosperity. Dhanteras is the most important festival from the standpoint of rural gold purchases, with farmers using the sale proceeds of the newly harvested crop to buy jewellery.

On Monday, Gold traded at Rs 29,851 per ten gram during early morning trade while Silver traded at Rs 40,399 per kg. Jewellery shops across the nation witnessed an unprecendented rush ahead of the festive season.  On Saturday, the yellow metal recovered by Rs 50 to Rs 30,850 per ten gram at the bullion market largely on positive cues from overseas and increased buying by local jewellers. Meanwhile, silver also climbed Rs 300 to Rs 41,500 per kg due to increased off take by industrial units and coin makers. As indicated by the World Gold Council, the demand for gold in India will range between 650 and 750 tonne this year. As per a report by Economic Times, rural India accounts for 60% of the consumption.

In India, Gold is not just a metal; it is a symbol of prosperity and basis of wealth. People consider it good luck to invest in gold or silver jewellery on Dhanteras.  The Indian authorities last week withdrew the amendment to the Prevention of the Money Laundering Act (PMLA) that had made jewellers subject to anti-money laundering legislation. This improved investor sentiment.

However, some reports said that effects of demonetisation, and an increase in bullion prices after the rollout of the goods and services tax (GST) reduced the demand of gold around to about 30% in run-up to Diwali . According to the commerce ministry data, gold import surged by more than two folds to USD 16.95 billion during the first half of 2017- 18. Increase in inbound shipments of gold also bloated the current account deficit (CAD) to USD 14.3 billion, or 2.4 per cent of the GDP, in the three months to June in 2017-18. The gold import, which has a bearing on the country’s current account deficit (CAD), was worth USD 6.88 billion in April- September 2016-17.  According to a report by PTI, in September this year, import of the precious metal dipped by 5 per cent to USD 1.71 billion from USD 1.80 billion in the same month of the previous fiscal.