KOLKATA: Gold sales in rural areas increased 15per cent in December 2017 over the previous month, and the trend is likely to sustain this month, according to traders and jewellers, due to the rise in soyabean, guar and cotton prices that have boosted purchasing power.
Better realisation from the kharif crop is enabling farmers to purchase gold, Nitin Khandelwal, chairman of All India Gems and Jewellery Trade Federation, told ET. "Reports from our members show that farmers are offloading their stocks as prices of agricultural commodities are showing recovery. The wedding season is approaching and they are buying for the season as well," he said. Steady gold prices through this period also augured well for sales in rural India. On Wednesday, gold was flat at Rs 30,450 per 10 gm, even as prices weakened overseas.
"Recovery in crop prices is the main reason for gold purchases. Gold is an important asset class for rural people," said Pratap Sharma, an Indore-based jeweller.
Commodity analysts said soyabean futures gained about 1 per cent during December over the previous month, the second monthly gain due to good physical demand for domestic crushing after the government increased import duty on all edible oils in November. Prices jumped about 9.6 per cent in November.
"Soyabean futures are expected to trade higher on anticipation of good physical demand and slowdown in arrivals in the coming months," said Ritesh Kumar Sahu, research analyst (agri commodities), Angel Commodities Broking.
