RBI’s move put pressure on customer’s side
Bullion Bulletin News desk, August 05: RBI’s recent move to tighten the gold imports further by
tying the imports with jewellery exports has resulted in a supply shortage for
the domestic market. With lesser stocks available in the market and
restrictions on imports, jewellers are propelled to give premiums just to
fulfill the demand.
Some
of the market leaders of jewellery industry have provided a brief view of the
market amid policy changes and huge restrictions.
Providing
a view on Andhra Pradesh market, Mr. Bhavdeep from Bhavdeep Jewellers told that
with no involvement of banks in case of gold imports, the yellow metal
availability is almost stopped for the time being opening way for illegal
trading. While the local gold price is at Rs. 28900/10 grams, demand is in zero
level due to the policy restrictions and the political uncertainties in the
state. Jewellers are facing problems due to zero stocks leading to closure of
shops. Still hope is, as the marriage season starts jewellery demand will
improve against all odds.
Mr.
Amit Modak from P N Gadgill Jewllers provided a clearer picture on the same. He
said, “RBI’s measures have only put pressure on the customer side. As the
restrictions result in increase in carrying cost, procurement cost that
ultimately inflate the base price along with the high premium level, finally
the end consumers have to bear the burden.
There is a price disparity of Rs. 3000/ounce in the market now as traders
are paying premium of $30-50/ounce over the international price. Talking about
the jewellery demand, the affection of people for it will never diminish as
there is hardly any great reduction (5%) from the previous year. There is
chance that bullion trading may come down due to the unrest and high parity.”
Talking
about the near future, Mr. Modak anticipated that with a very good monsoon this
year and an elongated marriage season, the market will see positive movement
after 45-60 days time period as the demand increases. For the rest of 2013, the
international gold price will be at $1240-1600 range while the domestic gold
price will be at Rs. 30000 (+/- 200) range due to the rupee depreciation
factor.
Mr.
N. K. Jain of Rara Borthers Pvt. Ltd. is big name in the jewllery business of
North East India based in Guwahati, Assam. While interacting, he mentioned that
North East India is an emerging market in domestic gold business with an annual
demand of 20000 kgs. Currently demand has been down after 15th June
due to the policy restrictions in gold imports. Particularly in June-July
period, there is a 50% reduction in demand from the previous year. As the
festive season and marriage season demand starts in September-October, he is
expecting a good demand with a 25-30% increment against all odds.