Home / News / India /  If you had bought gold on Akshaya Tritiya in 2019, price gain will surprise you

If you had bought gold on Akshaya Tritiya last year, today you would be sitting on gains of over 40%. Coronavirus crisis, rupee's depreciation against US dollar, meltdown in some asset classes like oil and stimulus measures by central banks across the world have boosted the price of gold. And despite the sharp rise in gold price over past one year, analysts continue to remain positive on gold, citing fears of a deeper global recession amid coronavirus crisis.

"In dollar terms gold is up 14% year to date and 34% over last 12 months. In rupee terms it is up 43% over Akshaya Tritiya 2019," says Shekhar Bhandari, Senior Executive Vice President & Business Head – Global Transaction Banking & Precious Metals, Kotak Mahindra Bank Limited.

"The inventory on hand for the jewellers as well as the gold jewellery held by households in India have seen significant appreciation in value. Prices in April last year around 3200/3300 a gram and currently around 4,600 levels have resulted in an increase in the wealth by 43% year on year for those who have invested, purchased or diversified in gold."

This year due to the lockdown-related restrictions, gold demand is likely to be muted in Akshaya Tritiya.

"Akshaya Tritiya 2020 looks subdued due to the continued lockdown on the back of the coronavirus crisis," said Bhandari.

Record high prices have also hurt physical demand in India. "Domestic jewellery demand has seen a significant drop given the rise in prices through the last financial year."

He remains positive on gold despite the sharp rise in prices and expects prices to touch 50,000 per 10 gram by this year-end.

On Friday, the Union Ministry of Home Affairs eased some restrictions on opening of shops. But such relaxations in any particular area would be decided by the respective state governments.

To cater to Akshaya Tritiya 2020 demand, some jewellers are offering online purchase to customers. But due to lockdown restrictions and high prices demand is expected to remain weak.

According to Surendra Mehta, National Secretary, India Bullion and Jewellers Association, around 23 tonnes of gold was sold in the Indian bullion market last year on the occasion of Akshya Tritiya. (With Agency Inputs)

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