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Gold May Have Rallied High, But Indians Unwilling to Profit from it

Gold may have Rallied High, But Indians Unwilling to Profit from it

Gold Silver Reports — The rising price of gold since the beginning of 2016 has not enthused Indians to liquidate any of their household gold to create liquidity. Indians have also reduced their gold offerings to temples. 

Gold has appreciated 25% from the beginning of this year on the back of geopolitical tensions, Britain’s decision to leave the European Union and the growing expectations that interest rates, which are arguably the primary counterweight to gold, are set to stay lower for longer and could even fall further.

“Despite prices surging ahead and a liquidity crisis being reported everywhere, we have not seen Indian consumers selling household gold.

“Last year, when it had touched . 29,000 per 10 gm, we had seen peo` ple offloading old gold. But this year, we are not seeing that trend even though gold price is around Rs 31,500-31,800,“ said Jitendra Jain ` of Mumbai-based scrap dealing firm Jugrag Kantilal.

The price rise of gold has also af fected India’s devotion quotient.Gold offerings to many temples have fallen in the recent months, said people associated with some temple trusts.

“Every day we are seeing a drop in gold offerings,“ Sanjiv Patil, the chief executive of Mumbai’s Shree Siddhivinayak Ganapati Temple Trust, told ET.

“Even silver offerings have also declined after silver prices moved declined after silver prices moved up. In last one month, the drop has been around 10-15% for both gold and silver.“

Currently, the temple holds 171 kg of gold and 3,000 kg of silver. It has already deposited around 54 kg of gold under the government’s Gold Monetisation Scheme (GMS) for 5-7 years tenure.“There will be two auctions of temple gold -one on August 20 and another after Diwali. Whatever gold will be left after auctions will be deposited in GMS,“ Patil said. — Neal Bhai Reports

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