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Costly gold has no domestic taker

Gold touched an all time high of Rs 15,500 per 10 grams on Wednesday. The high gold prices have scared individual buyers. Devraj Uchil reports.

business Updated: Feb 18, 2009 23:07 IST
Devraj Uchil

Rakesh Palkar (name changed), a middle-class resident of Mumbai’s western suburbs, would have normally spent a few lakhs on gold jewellery for his wedding. But he decided to buy only the minimum jewellery required that cost him Rs 57,000, as, he felt, buying gold when the prices are at the top is not good.

Gold touched an all time high of Rs 15,500 per 10 grams on Wednesday. The high gold prices have scared individual buyers. Retailers have seen a drastic fall in demand despite this being the wedding season.

The rise is due to an increasing shift by investors to gold, considering it to be the safest investment in times of global economic instability.

However, jewellery retailers have virtually stopped placing orders for fresh stock.

Ashok Gala, a gold wholesaler said, “We make more money when gold rates are down. There are purchasers and the turnover is high.”

“In domestic market, prices scaled a fresh peak on strong global markets and a weak rupee,” said Anand James, senior analyst at Geojit Comtrade.

“Gold is a good place to park money but not a long-term investment option.”