Tuesday November 02, 2010

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By Sam Devraj  ( Assistant Editor )

Golden day: People in India purchase gold on Dhanteras

CONSUMERS trickled in to jewellery shops and banks, more to buy coins and bars, a day before the key Dhanteras festival despite the near record high prices, traders said today.

“Retail sales have picked up from Saturday (October 30). Small denomination coins are doing very well. We expect our sales (of coins and bars) to grow by over 10 per cent,” said an official with Union Bank of India.

“In smaller towns, people prefer coins and bars as investment,” said the official.

The bank has offered a discount of two per cent on coins.

The benchmark gold contract on the Multi Commodity Exchange (MCX) was steady at Rs19,745 ($444.91/£278.57)) per 10 gram, still down 1.4 per cent from the all-time high of Rs20,028 ($450.98/£282.33) hit on October 14.

On November 3 India celebrates Dhanteras, when jewellers in the country register the highest gold sales in a year, and on November 5 Diwali.

The yellow metal is a sign of prosperity in India, the world’s largest consumer, and people buy it during these festivals.

Banks, and jewellery shops, are decorated with marigolds for the festival, and typically remain open till late evening on Dhanteras and Diwali, when establishments witness the highest footfall.

“The footfall is increasing by day, and tomorrow would be the highest. We hope Dhanteras would be better than last year, but the proportion of bullion sales to jewellery sales would definitely be higher,” said Ashish Pethe, partner at Mumbai-based retailer, Waman Hari Pethe Jewellers.

Gold sales during October 31-November 6 may rise by up to 40 per cent on year, supporting the outlook for record imports in 2010, a senior World Gold Council (WGC) official said in an interview on Thursday (October 28).

Indians traditionally buy gold jewellery, which is the most common gift during religious events and an essential wedding present, but buyers are becoming increasingly aware of the benefits of holding gold in other forms like bars, coins and Exchange Traded Funds.

“The retail segment has picked up giving us a push in sales before Dhanteras,” said an official with bullion importing state-run bank in Mumbai, which also sells coins and bars, adding “there was wholesale buying until last night, we booked around 100 kgs at $1,352/1,353 (£846.75/847.19) (an ounce).”

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