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Gold prices normally rises, silver falls in run-up to Diwali

Gold prices normally rises, silver falls in run-up to Diwali
PTI
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First Published: Tue, Oct 02 2007. 12 08 PM IST
Updated: Tue, Oct 02 2007. 12 08 PM IST
New Delhi: Consumers planning to do their Diwali shopping of gold should not wait for the last moment as past trend indicates that prices have mostly gone up in the one-and-a-half month period before the festival.
However, those with a penchant for silver can take it easy as prices of the precious metal mostly cooled off over the past seven years.
The general perception centres around buying jewellery 30-45 days before Diwali to get a good price. However, going by the trend, the bargains have been better for silver while gold became expensive as the festival approaches.
According to an analysis of price pattern during Diwali in the past seven years, gold prices rose in four out of the past seven years, while silver gained in only two years.
Gold prices rose by 2%-5% in the 45 days run-up to Diwali in 2000, 2003, 2004 and 2005. On the other hand, silver prices dropped during 2000, 2001, 2002, 2003 and 2006.
In 2006, both gold and silver prices declined. While gold was being sold at Rs8,975 per 10 gm on Diwali day last year, it was at Rs9,650 about 45 days before the festival. Silver price dropped from Rs19,850 nearly 45 days before Diwali to Rs18,050 per kg on the festival day.
However, the overall price trend has been on a sharp upswing over the past seven years. While gold prices nearly doubled from Rs4,490 on Diwali day in 2000 to Rs8,975 last year, the rise was even faster for the white metal. The silver price stood at Rs7,820 per kg on Diwali day in 2000, as against Rs18,050 last year.
“Gold attracts heavy demand during Diwali. Prices of gold usually go up and we are expecting gold to touch Rs 9,800 per 10 gm and silver to climb to Rs19,000 per kilogram level, taking cues from global market,“Delhi Bullion Market President Surendar Jain told PTI.
“Investors should buy intelligently this time. Since there has been too much of volatility in the global market, they should keep an eye on price movement before buying,” Kotak Commodities analysts Sahil Kapoor said.
Gold prices in the overseas market are likely to climb $770 an ounce and a possible dollar rise is likely to impact around Rs12 per gram on domestic gold prices despite rupee appreciating these days against the greenback, he added.
Prices of silver on the day of the festival were around Rs7,500 till 2003. It touched Rs8,000 level in 2004 and made a hysterical jump of 55% to Rs 18,000 level in 2006. Traders expect prices to touch Rs18,900-19,000 this season.
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First Published: Tue, Oct 02 2007. 12 08 PM IST
More Topics: Gold | Silver | Diwali | Money Matters | Commodities |