Diwali gold sales subdued in Gujarat
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Ahmedabad, Nov 11 - Gujarat celebrated Diwali with plenty to cheer but the dazzle was a shade muted as high gold prices made the yellow metal slide down on the must-buy list.The spectacular bull-run on Indian stock markets was expected to boost the hunger for gold. But unrelenting rise of crude oil prices and weakening of the US dollar made gold a less attractive proposition.People have preferred to invest on realty and lifestyle goods instead, say experts.Suresh Kansara, managing director of Gujarat Gold Centre (refinery), said that compared to previous years, more people were selling old gold jewellery.Sanat Jhaveri, secretary of the Ahmedabad Jewellers Association, confirmed that demand for gold had fallen.He reported a 10-15 percent drop in gold jewellery purchases. People apparently made profits by selling old jewellery.Almost 40 percent of India's sale of gold takes place during the Diwali season. Last year, gold sales during the festival time were 230 tonnes, out of a total of 715 tonnes sold in 2006-07, according to market sources.V.K. Sharma of Anagram Securities, a leading stock broking firm here, attributed the increase in sales of lifestyle products and in real estate was due to the Sensex factor backed by corporate performance.Another factor for low sales is the lack of purchases of gold by rich farmers. Most farmers prefer to invest in agriculture due to anticipated robust earnings from farm produce.This year the groundnut crop is back in favour, and farmers expect a good crop. The compulsory reservation of 10 percent of corn to be diverted to bio-fuel production in Brazil and the US has opened a window of opportunity for growers.Reports from China indicate that its agricultural season has not been good and it will import most of its commodity requirements, including from India.Gujarat is one source China has always looked to for cotton and castor oil. Also, other crops - cereals and cash crops - are expected to fetch good money, thanks to incentives and better pricing formula of the central government. (c) Indo-Asian News Service
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