And on Friday, gold (including standard gold) closed at yesterday’s trade price of Rs 31,281 per 10 grams, even as the metal fell in the international market, following an indication from the US Federal Reserve of a strong possibility of a rate hike in its December meeting. In the recent past, when the metal fell below $1,200 an ounce, several central banks bought it for forex reserves, stemming its decline in the process.
There are reasons for the optimism on the price front.
GFMS Refinitiv (earlier Thomson Reuters), an independent research unit, said in its Gold Survey for Q3 released today, “With early signs of professional (investor) interest in the market, plus improvement in grassroots retail activity, we believe that there is scope for further price appreciation. Global central banks’ buying has given gold some support above $1,180 and this is leading short-side traders to lock in profits. There is little appetite as yet for fresh longs, however. We are looking for a fourth quarter average of $1,224, leading to an annual average for next year of $1,285.”
Interestingly, there was another consumer-friendly change that took place on Diwali in the domestic market -- IBJA started issuing indicative retail gold prices across various carats via SMS, on receiving a missed call on a dedicated number.
So, while 22 carat gold of 916 purity, from which jewellery is made, closed at Rs 28,791 per 10 grams in the wholesale market, IBJA's indicative price of that variety for retailers was Rs 30,420.
Surendra Mehta, National Secretary, IBJA, says, “This facility was well received by consumers who can check with IBJA on rates. Since consumers can now approach retailers with a price, this has induced competition. For purity they have an option of asking for hallmarked jewellery. This means price and purity protection are offered to consumers irrespective of the brand.” Mehta said ever since the service was launched, IBJA has been receiving 5,000 missed calls a day. On launch day alone, its Facebook page got 5,000 likes.
However, the IBJA price is not binding on branded jewellery, which can still command a premium on design, making charges and other services.