Gold price hit a new high of Rs 78,500 per 10 gram on Wednesday on safe-haven buying amid rising tensions in the Middle East and a drop in US bond yields. Market participants expect the yellow metal to gain further as global geopolitical uncertainties grow. Prices rose by Rs 1,700 per 10 gram from Tuesday.
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“Due to the surge in gold prices, there is a buzz in Zaveri Bazaar. The number of customers has increased by up to 25 per cent on Wednesday as compared to a week ago,” said a spokesperson of the India Bullion and Jewelers Association (IBJA).
He said the Navratri festival, which begins on Thursday and continues till October 12, is an auspicious time to buy gold. “As prices are likely to rise further, consumers are visiting stores to pre-book and take deliveries of gold during Navratri,” he said.
Consumers are buying gold jewellery mainly for the upcoming wedding season, which will begin in November and last till February-March.
Due to the rising demand, the artisans or goldsmiths are working 12 hours a day instead of their usual working hours of eight.
“This is the China moment for India. China was buying gold to hedge against inflation. Now Indians have also turned to the yellow metal,” Jain said.
“Earlier we used to suggest that a person should put 15% of his investment in gold. But, now that gold prices have started giving 18-20% annual returns, the investment should go up to 25%,” said gold trade analyst Bhargav Vaidya.
“The main reason behind gold’s stellar performance is the start of the interest rate cut cycle in the US, followed by a strong possibility of further rate cuts in the upcoming US Fed meeting,” said Colin Shah, MD of Kama Jewellery.
