INDIAN consumers' demand to Buy Gold is weakening after the Rupee gold price reached new record highs, according to local press reports, while a new wave of scrap sales has also begun.
Over the last week, the Gold Price in Rupees has risen dramatically to reach a record of Rs 30,400 per 10 grams, an increase of 8.5% compared to last year's price.
Demand to Buy Gold is being kept at bay by this rise in the Gold Price, even during the current festival season of Gurupushya Nakshatra – normally a favorable day for jewelry sales.
"The sales picked up on Thursday morning, but plummeted during the course of the day," said Indian jeweller Nitin Ashtekar to India Times.
"Business has been slack generally, with only a few investing in the yellow metal. Many are waiting for a correction in price, but we think that the rate will increase further."
Another jeweller, Rajesh Gupta said "There seems to be a 30% fall in the overall sale of gold. People are not buying like before. Sale of gold used as an investment has gone down by 10-12% since January this year."
Furthermore, there is a 10% decrease in sales compared to last year's Gurupushya and a fall of 25% in Gold Investment, say dealers.
"Business has slumped as prices are very high. They are all waiting for dips below 30,000 Rupees," said Lokesh Kumar Agarwal, chairman of Brijwasi Bullion and Jewellers in Lucknow.
But this decrease in Gold Investment is favorable to gold scrap sales, which is undergoing a fast increase. Prithviraj Kothari, president of the Bombay Bullion Association, said that as "there is no money available and people are selling their old gold," scrap sales could rise to 400 tonnes this year. That would triple last year's 130 tonnes.
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