Record high prices to weigh on demand for gold

The demand for gold is expected to take a hit if the price of the yellow metal which has been hovering around 60,000, a level never seen before - remains elevated.

- RAJESH BHAYANI

Due to a sharp increase in price in a very short time and the flow of smuggled gold continuing, gold price in Mumbai is quoted at around ₹59,000 per 10 gram.

Typically, overall demand in the January-March and July-September quarters is moderate-to-dull, which is the case in the ongoing period.

However, this along with prevailing high prices ahead of April-June quarter, which is strong due to the marriage season and Akshaya Tritiya, this year may see low gold demand after a robust 2022.

Gold price has remained volatile with an upward bias in the current quarter. It fell in the early part of 2023 on expectations that the Fed will cut rates and inflation may come under control. But, in less than two weeks, gold prices in the international market have jumped 10 per cent from levels of $1,810 an ounce, touched a high of $2,010, before settling around $1,970 currently. The recent gains follow several events that have led to gold buying for its safe haven character.

Domestic prices have also jumped 8 per cent in Mumbai's Zaveri bazaar.