Gold rates bounce back after Diwali, Dhanteras slump

Nagpur: After a slump during Diwali and also a fall of over Rs450 a tola soon after Dhanteras, gold rates have bounced back on inflation concerns.
At Rs49,700 a tola, gold rates are Rs1,500 higher than that in Dhanteras which was on November 2. Silver is also up by Rs2,000 at Rs67,500 a kg in the Nagpur market.
The fall was due to apprehensions of a rate hike likely to be announced by the US Fed Reserve. However, the rates were intact. Rising inflation has shifted hedge funds investment to the yellow metal, making gold costly. In India, a weaker rupee has added to the rally. Gold is a dollar-denominated asset. So, if the greenback gets costlier as against the rupee, it makes gold costlier.
Ashish Pethe, chairman of Gem and Jewellery Domestic Council, said the rally has affected the demand moderately. “The levels of physical sale are expected to rise against after the rates are stabilized,” he added. Pethe said the rates have gone up due inflation as gold has been a hedge against it.
Nitin Khandelwal, former chairman of the council, said last month as much as 90 tons of gold was imported. This was enough to meet the demand. “However, if buying continues as consumers may hope to take advantage of the rally, the yearly imports may touch 1000 tons,” he said.
Rakesh Rokde from the Nagpur Sarafa Association said even the Indian demand is expected to have a role in the gold rally. The rally once again led to a hike after Dhanteras.