Even though prices are again showing an upward trajectory, the frenzy among customers to buy the precious metal has waned post-festive season, said Surendra Mehta, National Secretary of the India Bullion & Jewellers Association (IBJA).
Purchases are now largely restricted to the wedding season that will start from the middle of November and will continue till March of next year. Saurabh Gadgil, Managing Director of PNG Jewellers, said, “Investment demand has fallen by almost 35 per cent since Dhanteras. People are now coming to purchase jewellery for the wedding season.” This year’s Dhanteras and Diwali had witnessed a surge in gold and silver coin purchases as the prices of both precious metals had reached historical highs during the period.
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Explaining the reason behind the surge in gold and silver prices, Jateen Trivedi, VP Research Analyst (Commodity and Currency) at LKP Securities, said, “Gold and silver prices saw renewed buying interest as the dollar index failed to sustain above the 100 mark, keeping the bullish sentiment intact across bullions.”
In Comex, gold found strong support near $4,000 and rallied towards $4,085, while on MCX, prices surged by Rs 2,000 to Rs 1,23,100 after taking support around Rs 1,21,000. Silver outperformed, supported by strength in base metals, with Comex prices rebounding from $48.50 to near the $50 mark, and MCX silver rallying from Rs 1,48,000 to Rs 1,52,300 per kg. Hopes of a potential reopening of the US government shutdown triggered additional buying interest, as a data-driven outlook for the Fed’s future rate cuts remains pending until operations resume, Trivedi added. Also Read | NFO Insight: Is Bajaj Finserv Banking & Financial Services Fund a good bet in a choppy market?
A weakened US dollar and worries over a protracted US government shutdown continue to bolster the precious metal, increasing demand for safe-haven assets. The government shutdown could reduce GDP by 1–2% in the fourth quarter, added Renisha Chainani, Research Head at Augmont Gold.
