Gold demand post-strike below expectations: traders

Source : PTI
Last Updated: Tue, Apr 10, 2012 03:51 hrs
Woman touches gold necklace at jewellery store during festival in Allahabad

Gold demand was less than expected today here when the bullion market reopened after the 21-day strike, jewellers said.

"We expected the demand to be very high as the shops were closed due to the strike. However, the footfalls were much fewer than our expectations," Kumar Jain of Umedmal Tilokchand Zaveri said.

Gold today closed at Rs 27,985 per 10 gram, up by Rs 90 compared to the Saturday's close of Rs 27,895 here. The demand will definitely go up as the marriage and festive season is round the corner which will boost sales, but we expect it to pick up gradually, he added.

Jewellers in India ended their three-week strike on Friday after assurance that the government would consider scrapping a Budget proposal to levy excise duty on unbranded jewellery.

Although trading restarted on Saturday at the bullion market here, most jewellers in Maharashtra could not open shops as they participated in a pre-scheduled rally.

Bombay Bullion Association President Prithiviraj Kothari said the subdued demand is due to the lack of liquidity in the market.

"The demand is slow because there is no liquidity in the market," he said.

City-based PM Shah Jewellers' Dinesh Jain said, "The response is positive and we are expecting 20% more footfalls as the wedding season is about to begin."

This trend is likely to continue till after 'Akshaya Tritiya' (April 24), considered an auspicious day to buy gold.

However, Kolkata's Nemichand Bamalwa & Sons' Bachharaj Bamalwa said the demand there has been very high mostly in wedding related jewellery since they opened shops on Saturday.

"Looking at this trend, we expect 15-20% more demand than last year. As the wedding season is about to begin, people are purchasing ready-made jewellery as there is no time for bookings," Bamalwa, who is also the chairman of All India Gems and Jewellers Trade Federation (GJF), said.

Jewellers across the country had gone on strike from March 17 to protest the budgetary proposals of levying excise duty of 1% on unbranded precious jewellery and doubling customs duty on standard gold bars, gold coins and platinum to 4%.

Bullion traders and jewellers called off the strike last week after meeting UPA Chairperson Sonia Gandhi and Finance Minister Pranab Mukherjee, who assured them to look into their demands.

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