Gold seen as investment bet now

Hyderabad: Notwithstanding the gold merchants in Hyderabad’s Pot Market eagerly waiting for their customers as the auspicious ‘Sravana Masa’ has begun, the corporate sellers are marketing it as investment option.

“We hope there will be a huge buying this year, as the prices are low comparatively earlier month, and the auspicious days have started,” a jewellery merchant said. The traditional sellers of gold jewellery are hopeful that the sales will pick up in the next couple of weeks as the gold prices are at the lower levels coupled with festival season being starting.

However, the corporate jewellers have a different opinion. They are not hoping any big sale from gold but looking to diamond jewellery as a substitute for gold, since in the affluent customers prefer diamond to gold.

“The high-end society in Hyderabad is preferring diamond jewellery and considering it as a prestigious procession more than the shiny gold jewellery,” says a corporate jeweller in Panjagutta adding that the gold is being bought in biscuit form by those who want to invest in the yellow metal.

On the other hand, in the international market the gold prices are showing reverse trend, which was closed at $1,114 an ounce on Friday, on comex division of NYME, while the gold prices were falling since January. In a report on Friday, HSBC has predicted that gold prices are destined to recover to $1,200 per ounce to $1,225, towards the end of the year.

According to its analysis, the US dollar gets weaken once Fed raises interest rates thus making the gold less expensive and appeals to other currency holders (not US Dollar) to buy the gold. Even short-covering rally is expected as the investment sentiment is slowly reversing, the report says.

Technically, investors are concerned that China may further devaluate its Yuan and the demand for safe heaven is increasing. They may lead to raise in the gold prices further.

The analysts are of the opinion that the China’s higher gold reserve holdings would inevitably influence other emerging country’s central banks to venture in buying gold which may eventually create further demand for the precious metal. If buyers are looking to gold as an investment model and not jewellery, they can still prefer buying for short term gains in the form of bullions or ETFs.

Govt hikes tariff value on imported gold, silver

The government on Monday raised the import tariff value on gold to USD 363 per 10 grams and silver to $499 per kg, taking strong cues from the global market. For the first fortnight of this month, the import tariff value of gold and silver stood at $354 per 10 grams and $498 per kg, respectively.

The import tariff value is the base price at which the customs duty is determined to prevent under-invoicing. The tariff value is revised on a fortnightly basis. The change in tariff value of gold and silver has been notified by the Central Board of Excise and Customs, said the statement issued by the Finance Ministry.

At Singapore market, prices of gold on Monday rose slightly to $116.70 per ounce, while that of silver to $15.34 per ounce. In the national capital too, gold was ruling at over Rs 26,200 per 10 grams and silver at Rs 36,130 per kg. After declining in June, the country's gold imports jumped 62.2 percent to $2.96 billion in July, as against $1.82 billion in the year-ago period, as per the government data.

By KVVV Charya