Gold rush: citizens shed ornaments,jewellers buy with glee

A depreciating rupee,uncertain equity markets and a gloomy economic scenario are some of the thoughts running in every investor’s mind 24×7 .

Written by Garima Mishra | Pune | Published: February 20, 2009 1:34:34 am

A depreciating rupee,uncertain equity markets and a gloomy economic scenario are some of the thoughts running in every investor’s mind 24×7 . However there is a silver… rather,a golden lining. With gold rates climbing new heights almost everyday,almost every Indian household can claim ownership of some growing wealth. And Pune is no exception.

On Thursday,the yellow metal hit a record high of Rs 15,490 per 10 gm. But for jewellers,it is business as usual. The only difference is that nowadays they are busy buying gold instead of selling. So much so that most of the city jewellers are running up a gold chest. Not one of them is complaining as the rates keep climbing. It was Rs 15,420 on Wednesday.

Customers are out to make the best of the situation. According to Fatehchand Ranka,president,Pune Saraf Association and Maharashtra Federation,“The price of gold has increased 30 per cent in the past four to five months. The number of sellers is much more than that of buyers.”

Paresh Solanki,proprietor of Shagun Jewellers,has witnessed only gold sellers since Wednesday and believes that the precious metal will touch Rs 17,000 per 10 gm in the next 15 days.

At P N Gadgil Jewellers,the seller-purchaser ratio was 9:1. “We purchased three kg gold while our sales was only 300 gm yesterday. People are mostly coming with pure gold and we expect this trend to continue for some time,” said supervisor Sandesh Patil.

But not all customers are selling their gold. Riding the rise in gold rates,there is a new category of buyer — investors who are merging on the horizon,overshadowing the regular fare of family buyers for occasions such as weddings.

“No doubt the price rise has led people to sell gold for money. But there are many who are selling old ornaments and buying new ones instead — some kind of model updating,” said Sangeeta Lalwani,director,Gold Mart Jewellers.

Just around a month ago,the prices of gold and platinum were running neck-to-neck. While gold was at Rs 14,000 per 10 gm,platinum was ruling steady at Rs 16,000 per 10 gm.

The window for making that vital switch from gold to platinum at a cost of only Rs 2,000 per 10 gm did not last long. Over the past few weeks,platinum rates too have skyrocketed to around Rs 26,000 per 10 gm.

When & where to invest
Is it the right time to go for gold exchange traded funds? “GETFs are the best way to invest in gold as the variable cost is low vis-à-vis most other funds,” said Pune-based certified financial planner Veena Malgaonkar. GETF is a specialised exchange-traded fund (ETF) that tracks the price of gold and is traded on the major stock exchanges. GETFs are designed to offer investors a means of participating in the gold bullion market without taking physical delivery of gold.

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