Ludhiana: Expectation of further price drop holds back gold buyers

The downward trend, coupled with expectations of further fall in prices, has prompted many prospective buyers to postpone their purchases, jewellers said

The sharp fall in gold prices has dampened buying sentiment this Dhanteras with jewellers in the city reporting a decline in sales compared to last year as people, according to them, are preferring to wait amid the likelihood of further fall in prices.

City residents making purchases on Dhanteras in Ludhiana on Friday. (Gurpreet Singh/HT)

Gold prices, which peaked at around ₹1.95 lakh per 10 gram in January this year, have fallen to approximately ₹1.44 lakh by November 6. The downward trend, coupled with expectations of further fall in prices, has prompted many prospective buyers to postpone their purchases, jewellers said.

“This means anyone buying gold now could lose money. As expected, the number of customers this Dhanteras has fallen compared to last year, when gold was priced at around ₹1.20 lakh per 10 gram,” said Nilesh Garg, who runs a jewellery shop on Bindraban Road. Garg said he has recorded a nearly 40% decline in gold sales during the festive season this year.

Another city-based jeweller, Anand Sikri, said, “There are far fewer customers this year. Prices are falling and have declined by around ₹1,000 in just the past 24 hours.”

Investment consultant Atul Mongia said high prices and expectations of further corrections were keeping potential investors away from gold. “Traditionally, gold has been considered an ever-appreciating asset. People invest in it because it is something they can rely on during difficult times. But if its value starts declining, it defeats the purpose. It makes sense to buy gold when prices stabilise and are expected to resume their normal upward trajectory,” he said.

Garg pointed out that the situation was different last year, when gold prices were on an upward trajectory, making the precious metal an attractive investment option and encouraging more people to buy it.

Jewellers said the uncertainty over where prices would settle had affected both investment-driven purchases and festive buying, traditionally associated with Dhanteras.