Ahmedabad/Jaipur/Chennai, Aug 10 (ANI): With the gold prices touching an all-time high, many buyers waiting for a correction kept their purchases on hold, while some took the plunge - hoping to benefit if the upward march continued.
The skyrocketing price of gold has made an impact on the purchasing patterns of the buyers in Gujarat's Ahmedabad city.
"Price of commodities has increased very much, due to which we feel that we would be unable to buy anything in the near future," said Nehal Patel, a customer, adding that she had already pared down her purchases because of the steep prices.
The jewelers, however, advised the people to invest in gold, insisting that given the current global economic scenario the price volatility would be minimal in the jaundiced metal.
"In the future, we expect the gold prices to rise even more. The current situation in the U.S. with regards to the ratings and investments, on that basis, gold investment is the best option," said Vijay Soni, a jeweller.
Meanwhile, the gold buyers in Rajasthan's Jaipur city said the price surge would make a severe dent in their wedding budgets and force them to tone down their purchases.
"The impact has been tremendous on the buyers. One would have to cut down on what they were planning to buy. But, it is a compulsion and Indian weddings are incomplete without gold. No matter what the range of the gold is, the show must go on," said Neelu, a customer.
Jewellers here said that the uncertainty hovering over gold prices would keep a lot of potential customers at bay.
"The customers also get anxious as they don't know what the prices will be today or tomorrow. So, there is a situation of uncertainty, and definitely an atmosphere of insecurity prevails in the entire market. Market can further rise or fall by 2000-3000 rupees. So, nobody can predict anything," said Lalit Agarwal, a jeweller.
The traders in Tamil Nadu's Chennai city said the increase in the prices of gold has resulted in a shift in the buyer profile - with relatively well off people entering the ring to make some money, while the middle class buyers stayed away.
"Many people have started buying gold. Big items of gold are more in demand than small gold items. 80 percent of the consumers are buying big gold items. So, we think that only rich people are buying, while the lower and lower middle class are not buying," said Jayantilal J Challani, President, Madras Jewellers and Diamond Merchant Association.
The gold market in India is almost entirely fed by imports and a drop in the rupee to its lowest in nearly six weeks has also weighed on gold demand. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Gold has risen by about 7 percent this month, driven by flows of cash out of equities, bonds and currencies, after the United States lost its top-notch credit rating.
International spot gold gained more than three percent on Tuesday, roaring to an all-time high for a second consecutive session to stand above 1,770 dollar as equity markets dived on growing fears of a global recession following last week's U.S. credit downgrade. (ANI)
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