The Spot Gold bulls will need to break above 1,511, the 2019 high, to travel north towards 1,530.00 and 1,555.00 resistances.
Gold is trading above its main simple moving averages suggesting bullish momentum in the medium term. Support is seen at 1,472.00 and the 1,452.00 levels.
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While the abnormal increase in rates of gold has severely hit bullion trade in Tiruchi, poor and middle class buyers have been facing the brunt of it.
Though the rates of gold have generally been witnessing an increasing trend, the current phase of it, according to industry sources, is “unprecedented” and “highly abnormal”. One gram of gold (22 carat) was sold at ₹10,240 on September 12 in Tiruchi. The price for 24 carat gold was ₹11,171 per gram. The rates went up by ₹931 and ₹892 respectively in 10 days.
It was ₹6,425 for one gram of 22 carat gold and ₹7,009 for 24 carat gold on August 9, 2024. Thus, the rate has gone up by more than ₹4,000 a year.
If a buyer wants to buy one sovereign of gold ornament, she or she will have to shell out between ₹90,000 and ₹95,000, including making charge, wastage, and Goods and Services Tax (GST).
Industry leaders say the bullion trade is witnessing testing time in view of the current phase of increasing trend. They say the current phase is “mind boggling”, which is not good for the traders and the buyers, especially the rich. For a section of buyers, who still prefer to invest in gold, the abnormal increase has raised confusion among them on whether it was a natural rise or manufactured rise.
Tiruchi houses about 350 small to medium-sized jewellery shops. Most of them are located on Big Bazaar Street. In addition to them, there are about 15 major jewellery showrooms. There are many auspicious days in the Tamil month of Aavani, which is considered as a good season for the sale of gold. But traders say that business is not good mainly due to the prevailing abnormal rates of yellow metal.
“The high rates keep the customers away. The poor and daily wage labourers find it extremely difficult to buy gold ornaments for marriages. On an average, the poor class people buy seven to eight sovereigns for a marriage. Now, they settle with four to five sovereigns,” says B. Saravanan, secretary, Tiruchi Jewellery Owners’ Association.
A general manager of a jewellery showroom belonging to a corporate company in Main Guard Gate said the volume of sale had gone up sharply in recent weeks. However, the sales volume of gold had gone down significantly mainly as the poor and middle class buyers have been keeping away in view of high rates.
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