New Threat Takes the Sheen off Gold Sales

The threat of new Covid-19 variant Omicron has put a break on wedding season demand for gold in India, though the domestic price of the yellow metal has dipped, taking a cue from international rates.

People who were purchasing gold for the upcoming wedding season, which extends till july next year, have now gone on a wait-and-watch mode, said industry executives, as there is a lot of uncertainty over how Omicron will behave in the upcoming weeks and what will be the severity of the virus.

The spot price of gold is around Rs47,670 per 10 gm, down from around Rs49,500 per a few days ago.

“After Diwali and Dhanteras, there was lull in demand for about a fortnight. But then again demand started picking up. Once the Omicron virus surfaced, people became cautions and the movement is very slow, though the wedding season is in full swing,” Ashish Pether, chairman of All India Gem & Jewellery Domestic Council (GJC) told ET.

The two waves of Covid-19 in India created a degree of financial uncertainty among people. Buying gold became a low priority as paying medical bills and arranging for daily needs, were on top of people’s mind. Weddings were pushed back and people were forced to cut down on expenses.

By August 2020, the price of gold in India had increased to Rs57000 per 10 gm, as global cases of Covid-19 had risen and people had started parking money in gold since the equity markets were witnessing a roller coaster ride.

However, the situation started improving from September this year as Covid cases came gathered momentum.    

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