Akshay Tritiya set to lose sheen as gold prices soar

The Indian consumer may buy less gold on the auspicious occasion of Akshay Tritiya this year than she did during the previous year, thanks to a spurt in gold prices to over Rs 17,000 per 10 gm. However, if yet-to-be-released import figures for the first quarter are any indication, marriage demand around Akshay Tritiya — a day chosen by people across the country for weddings and starting new ventures — which falls on May 16 is likely to make up for the shortfall simply because people tend to place orders for jewellery a couple of months ahead of the occasion. Sanjiv Batra, chairman and managing director of MMTC, the country’s largest importer of gold, said imports rose eight times to 240 tonnes in the first quarter of 2010 from the year-earlier period as jewellers stocked up to meet imminent festive and marriage demand. An official from another well-known industry organisation said he expects gold imports Q1 this year to be up by 20-25% from the corresponding period in 2008 when imports into the country were pegged at 106.7 tonnes by World Gold Council. WGC data shows imports in Q1 of 2009 were a meagre 24.2 tonne. However, most bullion dealers and jewellers feel that imports in the April-June period could slow down from the previous quarter if prices keep up their tempo. This seems evident from Mr Batra’s expectations of imports by MMTC in the month of April being flat at 13 tonnes or roughly the same as in April last year. He, however, attributes this partly to the huge imports of 85 tonnes in India during March. “The demand for gold on Akshay Tritiya could come down if prices were to keep rising,” said Prithviraj Kothari, director of RiddhiSiddhi Bullions, a large bullion dealer. “The first quarter imports show that jewellers are well-stocked to meet marriage demand falling on Akshay Tritiya but inventory levels would fall in the months ahead if prices went up from the current level of over Rs 17,000.”

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