Thaindian News

New Delhi/Mumbai, Aug 20 (IANS) Soaring gold price caused by international economic concerns seem to have dampened sentiments of the domestic consumers who are being deterred by an all-time high price of Rs.28,100 per 10 grams of the yellow metal, say experts.

“Consumer demand has obviously come down. People have suddenly stopped buying,” said Balram Garg, managing director and chief executive of the Delhi-based PC Jewellers Group.

Though the footfall at jewellery showrooms may have fallen, the year-on-year demand was still robust, he said.

“A majority of consumers do not go for medium to large quantity, they are focusing on small quantities for now,” he said.

Gold prices soared to an all time high of Rs.28,100 per 10 grams in the local market Saturday.

In Delhi, gold prices surged over Rs.28,000 per 10 grams - a Rs.1,200 hike over Thursday’s closing.

Garg was optimistic that the festival season would shore-up the consumer sentiment for the precious metal.

“Despite the surge, we are optimistic that the consumers will come back (to showrooms) owing to the festival, season round the corner,” said Garg adding that the price may reach Rs.30,000 per 10 grams by Diwali.

Jewellers in the national capital’s famous Dariba Kalan market said that high prices have driven away customers.

“Consumers know that high prices would continue, but they are very careful to choose the right time to buy or sell gold,” said Pawan Verma of Vipul Jewellers.

But commodities analysts feel that the gold price may be moving towards a correction as profit booking and re-sale of gold has increased.

“There might be a correction in the short run due to profit-booking. But for the long term the gold prices will continue to be high,” Naveen Mathur, associate director, commodities and currencies told IANS from Mumbai.