MUMBAI: There was a great rush to the gold markets on Akshaya Tritiya as the gold prices, which fell by near 15 per cent in 2013, increased the appetite for the yellow metal. The bearish reports and outlook on gold prices did not deter the buyers in the Indian markets.
Akshaya Tritiya is considered to be a day when whatever you buy it is expected to multiply. It is the day when India sees a huge rush for gold buying.The gold prices fell 4.7 per cent in Jan-March period and further declined 7.5 per cent in the month of April.The much envious bull-run in the gold market, which lasted near 12 years supported by Global central banks, ended this year. The major central banks have moved to lower interest rates and easy money policies.There have been concerns that gold supplies will increase as EU nations may be forced to sell gold from reserves to fight debt crisis. Also, 2013 has seen a turnaround with lower inflation in China and US. Investors began shifting towards risky assets like equities in the last few months.
To add to the woes, major biggies started liquidating their gold investments following bearish outlook reports from the likes of Goldman Sachs, Societe Generale and others. The SPDR gold holdings now are down 22 per cent in 2013, a 4-year low.Buying in India continued even as the government and RBI moved to discourage gold buying as it leads to widening the Current account deficit. The authorities have raised gold import duty to 6 per cent and in the latest move, it has been decided to restrict the import of gold on consignment basis by banks, only to meet the genuine needs of exporters of gold jewellery.
The Indian retail sellers and bullion associations are expecting the sales on Akshay Tritiya and this week to be higher by 30-40 per cent as compared to last year same time. Most bullion traders say that most of gold that they imported in April after price fall has been sold off already even before the day ended. The NSE ETF platform saw record high volumes at Rs 691 crore on the day of Akshay Tritiya, an increase of 14 per cent from previous year.
The trade data for the month of April shows 138 per cent increase in gold import in the month of April as importers made use of the falling prices to buy ahead of the Indian wedding season and also the auspicious buying date. The world Gold council is estimating Indian imports at 900 tonnes, which is more than last year, benefiting from lower prices.
Source : Bullion Bulletin