THIRUVANANTHAPURAM : Amid the Covid-19 scare, the gold sector has some reason to cheer as the drop in prices has lured customers back to jewellery showrooms in the state. Although the footfall was not as expected, it did bring in some hope in the sector.
The board rate of gold price, which touched an all-time high of Rs 4,040 per gram on March 6, dropped to Rs 3,740 per gram on Thursday morning and it closed the day with Rs 3,740 per gram with weak global cues and rupee appreciation.
According to traders, the footfall was not in tune with the market demand in the same period in the previous year or before the Covid-19 outbreak. However, the rush in jewellery shops has brought back some hope, despite the fact that marriages are being cancelled en masse after a health clampdown in the state.
Abdul Nazer, treasurer of All Kerala Gold and Silver Merchants Association and director of All India Gem and Jewellery Domestic Council, said the gold price which touched Rs 32,320 per sovereign has climbed down to Rs 29,920 and this has rekindled the hopes of people.
Although the price of gold is ruling relatively low, the customers are yet to get the benefit of the drop in prices of gold in the international market due to weak rupee. However, according to Somasundaram P R, managing director, World Gold Council (WGC), the volatile gold prices and weak global economic activity are likely to keep consumer demand soft in the near term.
An analysis by WGC shows that between 1990 and 2015, a 1 per cent rise in per capita income led to a 1 per cent rise in demand for gold in India, indicating that gold demand rises with income. Given the risk from greater fears of global recession, consumers are holding back their temptation to buy gold jewellery for the time being, he said. The business is still around 30-35 per cent of the normal business across the country.