Demand for gold surges despite rising prices

Demand for gold surges despite rising prices
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First Published: Sun, Apr 27 2008. 01 37 PM IST
Updated: Sun, Apr 27 2008. 01 37 PM IST
By PTI
Bangalore: This price rise has raised no heckles, on the contrary the market is as glittering as ever with both buyers and sellers scrambling to make maximum out of the prevailing situation.
Yes, we are talking about the bullion market where gold prices have zoomed by about 35% in a shot span of five months. But such a sharp jump in prices astonishingly have not had any dent in physical buying of the metal.
Jewellers say age-old notion of high prices deterring sales have been proven wrong in the case of gold. They said high prices are attracting even more buyers as they see gold as the safest investment options with attractive returns.
“In fact, whenever there is volatility, sales go up. The sales being inversely proportional to the price is very old phenomenon, which does not hold good today,” Bangalore Jewellers’ Association President Mahesh Pati told PTI.
“In less than six months, gold prices have gone up from Rs9,250 per 10 gram in October 2007 to Rs12,458 per 10 gram in March 2008 and are Rs11,730 per gram as on 24 April,” he said.
With returns being assured, gold in increasingly seen as the safest bet and its traditional role as ornaments is a bonus.
“With globalisation and IT revolution, people have deep pockets and they are spending on gold not just for adornment but as an investment also,” Pati said. “People who had bought bars and coins are rushing to sell them. They see it as the next best investment after real estate,” said bullion trader Hiramal Jain.
The rise in gold prices has only increased the demand, and sale of heavy jewellery is still more as compared to the lightweight jewellery, another trader said.
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First Published: Sun, Apr 27 2008. 01 37 PM IST
More Topics: Gold | Demand | Price | Money Matters | Commodities |