Prices of Gold Increasing while demand is decreasing
Prices of gold are going up day by day. Price of gold has reached all time high of Rs.31,035 for 999 pure 10 grams in Delhi. Its price in Mumbai is Rs.30,705 and in Hyderabad is Rs.30,970. Online trading platform MCX has marked gold price initially at Rs.30,370 and has reached to Rs.30,699. Reason behind the growth of price of gold in domestic market is the increase in the price of gold in the international market. Price of silver has incrased to Rs.57,000 per kilo. Prices of gold in the international market might have increased because of the announcements of US federal bank regarding schemes and bonds.
Bullion association members are saying that the demand for gold is decreasing in the market with the increasing prices. People are coming forward to purchase gold only when it is necessary. Within four or five days, these prices might get decreased a bit.
Since the prices of gold has increased to Rs.30,000 per ten grams, the sales of gold in India has come down. This is the country where there is a tradition of purchasing gold during marriages, during any bonus in salaries and in case of crop returns. Also, there is a tradition of purchasing gold ornaments for sisters, wife, daughters, in India, on any occasion. In such country, the sales of gold have reduced since the prices of ten grams of gold has touched Rs.30,000. Sales of gold have been affected by decrease in Rupee value, customs tax on imported gold, decline in country’s growth rate, inflation, high interest rates, lack of proper rains in the right season, etc. Yearly the sales of gold in India will be around 1,000 tons, but this year (2012), it will not be more than 700 tons. In 2010, India has imported 1006.3 tons of gold in the form of bars and coins, which are useful as investment tools. In 2011, this amount is not more than 933.40 tons.
According to the reports of WGC, the demand for gold in India in the first three months of 2012 was 207.7 tons while the demand for the same metal in the next three months had got down by 181.3 tons. On the other hand, there is also decline in gold investments.