MUMBAI: Gold is enjoying a modern-day renaissance in the country. From retail sales of 300-400 kgs of gold bar per day at the start of 2008, demand has surged to 3,000 to 4,000 kgs per day.
Barring the slight rise in price at the start of this week, most counters registered an unprecedented sale. Gold's dip below Rs 12,000 per 10 grams early this month has sparked off widespread buying. From a high of Rs 13,900 for 10 grams around a month and half ago, the price of the yellow metal slipped to Rs 11,850 on Wednesday, ensuring droves of customers.
The demand for the metal has skyrocketed to such an extent that imports for the month of August alone are set to cross 100 tonne. Last August, the country imported 69 tonne of gold.
"Ten days ago, the price was Rs 11,300 and retail outlets recorded consumer demand many times higher than that witnessed during 'Dhanteras', the first day of Diwali, or 'Akshaya Tritiya', when buying gold is considered auspicious," said Suresh Hundia of the Bombay Bullion Association.
India, the world's biggest buyer of bullion, is also set to increase its gold imports for the first time in nearly 12 months, analysts told TOI. Given that the first half of 2008 saw volatile gold prices driving down demand, the last few weeks have witnessed a sudden rush of imports.
The country imported 750 tonne of the yellow metal in 2006. This dropped to 449 tonne in 2007, as a consequence of the rise in price. Traders who spoke to TOI said India imported 122 tonne between January to July 2008. The corresponding period of 2007 saw 269 tonne of the metal coming into the country.
Incidentally, the rise in demand is being attributed by traders to the next festival after 'Raksha Bandhan', which is Ganesh Chaturthi, which falls on September 3. Traders maintain that many consumers, particularly in South India, normally buy idols or jewellery in gold to bedeck their favourite God and the rush to retail stores ensures that the line-up to the festival has already started.
Gold generally moves in tandem with crude oil as the latter signals inflation. The fall in price in the international market has ensured a slump back home.
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