People have returned to the gold market this year on the occasion of Akshaya Tritiya, making token purchases and even wedding-related gold purchases.
This response is more positive than last year when the Akshaya Tritiya came under the shadow of excise duty protest, P R Somasundaram, Managing Director India, World Gold Council, told BusinessLine on Friday.
“There is a positive sentiment. Enthusiasm and optimism is back. Consumers are back this year and trade is positive,” Somasundaram said.
“Last year the excise duty strike had affected the response. Quite a few had not even returned for Akshaya Tritiya. This year it is a very different Ashaya Tritiya and more positive,” he said.
The optimism in the market has brought consumers back with positive sentiment. Trade has almost already adjusted to PAN requirements and they are now preparing for goods and services tax (GST).
“The entire market is moving towards transparency,” he said.
Three factors
Somasundaram also said that two factors are in favour of the return of consumers to the gold market on the occasion of Akshaya Tritiya.
One is that the international prices have shot up 8.5 per cent since the beginning of this year. On the other hand, Indian prices are up 2.5 per cent. This 6 percentage gap is a good incentive for investment in gold.
The second factor is demonetisation. The latent demand is also getting released — people who could not buy in November or December after harvest are finding an occasion to come back, he said.
Also, with stock markets doing well now, it adds to the positive sentiment for gold, especially among people with low-risk appetite. Entering at this current level in stock markets may be a big task for those with low-risk appetite and could prefer gold as a preferred asset class this season, Somasundaram noted.
“This adds to the glitter of gold this season,” he added.