The sharp rise in gold prices on the back of the raging Israel-Hamas war is set to hit jewellery sales during the upcoming peak festival season of Dhanteras and Diwali.
Gold prices jumped 3 per cent, or by ₹1,819 per 10 gram, to ₹58,396 on Friday from ₹56,577 on October 3, according to data from the Indian Bullion and Jewellers Association.
On MCX, gold for December delivery was up ₹687 per 10 gram, or 2 per cent, at ₹58,605 on Friday.
Impact on sales
Suvankar Sen, Managing Director, Senco Gold and Diamonds, said the rise in prices of the yellow metal can impact the volume of jewellery sales. But, on the other hand, it may also push consumers sitting on the wall expecting a fall in prices to take the plunge and buy jewellery before it becomes even more expensive.
“Irrespective of prices, it has been a tradition for consumers to buy gold during Dhanteras and Diwali, and we believe that this will continue. The focus will be more on diamond jewellery as the prices of the precious stones have dropped in recent months,” he added.
In fact, gold prices reversed their bearish trend for most of the last month after the outbreak of geopolitical tension and worries over the US economy. The fall in yellow metal prices last month boosted consumer sentiment closer to the peak festival and wedding seasons.
Gold prices had plunged by ₹1,535 per 10 gram to ₹57,760 on September 29 from ₹59,295 on September 8.
However, as Israel intensified its war on Hamas, crude oil prices can be expected to vault $100/barrel mark and enhance the safe haven appeal of gold.
Leading German lender Commerzbank sees gold prices touching $2,100 a troy ounce by the end of next year from $1,900
