look news india
Ahead of the upcoming festive and wedding season, the Indian bullion market has become bustling with activity. This week was full of huge ups and downs for investors and common buyers. Due to profit booking in international markets, strengthening of dollar index and change in bond yields, gold prices fell sharply by about ₹ 3500 per 10 grams in the last one week. After a series of continuous decline, the prices of the yellow metal remained stable in major markets across the country on Sunday. From Delhi, Mumbai, Patna, Lucknow to Kolkata, prices in bullion business remained at yesterday’s level. Due to the closure of the International Commodity Exchange (MCX) on Sunday and absence of new deals at the local level, there has been stability in the retail market.
If we look at the past trading sessions, the price of gold has become quite soft in both the domestic futures market and spot market. Since the beginning of the week, amid global uncertainty, big investors had started booking profits at higher levels. Apart from this, the statements regarding monetary policy of the US Central Bank (US Fed) and indications of stability in interest rates gave strength to the dollar. Whenever the dollar strengthens in the global market, gold traded in dollars internationally becomes costlier against the currencies of other countries, thereby reducing physical demand. Its direct impact was visible in India too and the prices of domestically imported gold started slipping rapidly. An average reduction of up to Rs 3500 was recorded in the price of 24 carat pure gold per 10 grams within five trading sessions, due to which both customers and jewelers have stood up.
Being Sunday, no new major changes were issued by the bullion associations on daily basis. In the capital Delhi, the prices of both 24 carat and 22 carat categories remained at the closing level on Saturday. Even in Patna, the capital of Bihar, Saturday’s rates remained applicable in the wholesale and retail markets. No change in prices was seen even in major business centers of Uttar Pradesh like Lucknow, Kanpur and Varanasi. Base rates in Chennai, Bengaluru and Hyderabad in South India also remained stable, barring minor variations in local taxes and making charges. Mumbai’s famous Zaveri market also remained quiet over the weekend, with traders now waiting for the market to open on Monday and new global cues.
Buying gold for Dhanteras, Diwali and weddings is considered a tradition and the safest investment in Indian families. For the buyers who were postponing their purchases in view of the record high of gold for the last few weeks, this recent fall of Rs 3500 has brought a relief. Market analysts believe that the current decline could prove to be a great opportunity for medium-term investors and wedding jewelery makers to start purchasing in installments. However, market experts also suggest that instead of investing the entire budget at once, it would be a wiser step to adopt the strategy of ‘buy on dips’ i.e. small purchases on decline. In the coming days, geopolitical tensions, movement of crude oil and currency exchange rates will decide whether gold will become cheaper from here or will gain momentum once again.
The biggest confusion that customers face while buying gold is regarding its purity. 24 carat gold is considered 99.9% pure. This gold is extremely soft and flexible, due to which coins, gold biscuits and bars can be made easily, but intricately carved jewelery cannot be made from it. 22 carat gold is most commonly used for making jewellery, in which 91.6% is pure gold and the remaining part is prepared by mixing other strong metals like copper or silver. Therefore, whenever gold prices fall in the market, those buying jewelery for 22 carat and those buying for investment purposes should especially keep an eye on the prices of 24 carat.
Apart from the price, the legal guarantee of purity is also very important while purchasing gold. According to Indian Government rules, it is now illegal to sell unhallmarked gold jewelery across the country. Whenever you buy from a nearby jeweller, check three important marks on the jewellery. First the triangular logo of Bureau of Indian Standards (BIS), second the purity scale like 22K916 or 18K750, and third most important the 6 digit alphanumeric HUID (Hallmark Unique Identification) code. Through BIS Care App, customers can instantly confirm the purity of the jewellery, testing center and license of the jewelers by entering that 6 digit code on their mobile phone. Never forget to take a confirmed bill, because the exact weight of gold, carat and making charges for that day must be clearly mentioned on the bill.
Research analysts of the commodity market say that this is a period of consolidation i.e. stagnation for gold. After the sharp selling in the past few days, prices may now trade in a limited range. Domestically, there is huge demand for physical gold in India during festivals, which helps in preventing prices from falling too much. On the other hand, the strengthening of the dollar at the international level and the flow of funds in the bond market keep the rise of gold under control. Therefore, when the domestic futures market opens next week, the movement of gold will largely depend on the US economic data, the stance of the Federal Reserve and the strength of the rupee.