Gold sales may lose sheen

CHANDIGARH: Rising prices of gold and RBI guidelines to banks on cutting down sales of the yellow metal seem to be taking the sheen off Diwali buying this year. While markets remain full of vehicles and people, traders say sales are quite unlike the usual festival mood this year.
Besides the tab on sales of coins and bars, banks are also not importing fresh stocks of gold.In turn, the usual special offers, discounts and Dhanteras sales that are rolled out to woo customers are absent — all adding up to the dull mood around Diwali.
"While there seems to be a rush in the markets, people are avoiding any major spending this year. Neither gold nor silver has registered any major sales so far. People have invested in infrastructure and there is no liquidity, so sales are going down," said Vinod Talwar, president of Chandigarh Jewellers' Association. Talwar added that the tab on jewellers buying gold from banks had added to the woes of traders. "It is not only our trade, but the mood is dull in general. People from other businesses are also noticing the same," he said.
The RBI had earlier this year also asked lenders to refrain from aggressively marketing gold and turning it into a business. "Curb on import of gold and tab on acquiring more of the precious metal have led to slump in sales. With less of gold stock, banks cannot offer discounts. People aren't interested in buying gold. We cannot even sell to non-customers, so Dhanteras is not going to be the usual grand affair that it is," said a senior official from a Sector 9-based private bank. Another senior manager with a private bank added that the target-driven Dhanteras selling is out of the picture after the RBI guidelines this year, leading to less enthusiasm amongst both buyers and sellers.
Another city jeweller Bhushan Mahajan attributed the slump in sales of gold to inflation. "Gold sales are lower than ever this year. Inflation and high prices have driven customers to stay away from investing in the metal. The returns are also uncertain with the prices fluctuating. Silver could replace gold as the most-bought precious metal on Dhanteras. We are still hopeful of sales picking up on November 1," Mahajan said.