KOLKATA, 25 OCT: Buying gold promises to be a safer and more lucrative investment amidst a global economic turmoil and Europe’s debt woes and this is precisely why Indians go for it. Indian households became richer this Dhanteras as market analysts say. Even though the gold prices were stable and was traded at around Rs 27,000 per 10 gram yesterday, traders say because of the global turmoil gold prices may touch a new peak of Rs 30,000 per 10 gram after Diwali.
Experts are predicting that gold will rise to the level of US$ 2,500 an ounce in the international market. “The metal is traded at the level of US$ 1,700 an ounce; if it rises to even US$ 2,100 an ounce in the next six months, gold prices in India will cross the level of Rs 30,000 per 10 gram,” said a city-based bullion trader and analyst, Mr Amitava Bakshi.
However, this rise in gold prices creates a unique impact for Indian consumers and the economy. According to a report ~ India: Heart of Gold ~ by World Gold Council, Indian households hold nearly 18,000 tons of above-ground gold which is the largest stock on earth. It is valued at US$1 trillion, which exceeds 70 per cent of India’s market capitalisation of all listed companies, and is four times higher than the total exposure that Indian households have to the stock market. A mere 1 per cent increase in gold prices increases the wealth of Indian households by Rs 45,000 crore, the report indicated.
This Dhanteras, the price pinch did not dampen the spirits of the gold shoppers in the city as people in large numbers thronged the shops to buy gold ornaments.
Long queues in front of jewellery shops threw traffic out of gear at several important city intersections like Sovabazar-Hatibagan and Golpark-Gariahat.
While some were seen buying gold coins from banks, most people preferred buying lightweight jewellery to mark the occasion. Of course, stabilised prices tempted many to buy even chunky pieces. Ms Dipali Basu, a resident of Salt Lake, said due to heavy prices she settled for a gold nose ring and silver coins.
With a rise in gold prices, silver has found its way back to the buyers’ list on Dhanteras.
Dhanteras added Rs 100 to Rs 27,130 per 10 grams, silver gained Rs 300 to Rs 53,500 per kg in jewellery shops and banks. Ms Minu Ghosh of Santoshpur said that since the day is auspicious, one should buy precious metals even if it’s silver in case gold is too heavy on the pocket. In the past 32 years, the price of the yellow metal shot up 26-fold. From 1979 to 2011, gold price increased from Rs 1,000 per 10 gram to Rs 28,000 per 10 gram in 2011. This year gold prices rose by Rs 1,000 per 10 gm five times in just eight months. Of this, the last three thousands were added in just 22 days.