Jewellers in India report a resurgence in gold purchases, albeit in small quantities, as the summer wedding season fuels demand and prices drop from a record high earlier this year.
The MCX gold rate has fallen by 1% to ₹1,52,306 per 10 grams, while silver prices have decreased by 1.51% to ₹2,48,000 per kg. In Mumbai's spot market, gold prices have declined to ₹1.49 lakh per 10 grams, and silver has dropped to ₹2.43 lakh per kg.
The increased footfall in jewellery stores is attributed to the ongoing wedding season, despite customers remaining cautious due to price volatility. Suvankar Sen, managing director of Senco Gold, noted the acceptance of this volatility among consumers. Additionally, sales of lower caratage jewellery have risen by 15% year-on-year, indicating a trend of consumers opting for more affordable options.
“Customers are cautious but they have accepted the volatility in prices. Footfall has increased as the summer wedding season is underway.”
Suvankar Sen, Managing Director, Senco Gold
Colin Shah, managing director of Kama Jewelry, highlighted the impact of the US Federal Reserve's decision to maintain interest rates, with a possibility of future tightening. This decision has created a mixed outlook for gold, as the strengthening US dollar typically affects non-yielding assets like gold. Meanwhile, easing tensions between the US and Iran may contribute to a slight cooling in gold rates.
The recent fluctuations in gold and silver prices are part of a broader trend influenced by global economic factors, including currency strength and geopolitical developments. Historically, such factors have played a significant role in determining the attractiveness of precious metals as investment assets.
“The US Fed's decision to keep rates unchanged, while indicating a possibility of further tightening later in the year, has led to a mixed outlook for gold.”
Colin Shah, Managing Director, Kama Jewelry
Background
The recent fluctuations in gold and silver prices are part of a broader trend influenced by global economic factors, including currency strength and geopolitical developments. Historically, such factors have played a significant role in determining the attractiveness of precious metals as investment assets.
Looking ahead, market participants will closely monitor the US Federal Reserve's policy decisions and geopolitical developments, as these will continue to influence gold and silver prices. The ongoing wedding season in India may also sustain demand for gold, albeit with cautious consumer behavior.
