Runaway gold lures buyers, record Diwali sales likely

Gold lovers who have waited long enough for prices to fall have given up, flocking back to jewellers over the past few days as the metal's relentless rise makes them jittery.

- Ram Sahgal

According to industry officials, FOMO, or the fear of missing out, has taken hold, triggering a surge in retail demand for bars, coins and ornaments as gold trades at never-before prices.

Benchmark gold price on commodity derivatives exchange MCX hit a record ₹121,000 per 10 gm on Tuesday. The price took cues from abroad, where gold extended its tearaway rally following the US government shutdown, weakening dollar and political and economic chaos in France.

Despite soaring prices, this year's Diwali may set a new record in sales, an industry expert said, while another cautioned that this may not be the best time to buy gold as an investment.

"FOMO has gripped buyers, who were anticipating a correction since the price topped 1 lakh (on 21 August)," said Surendra Mehta, national secretary of India Bullion and Jewellers Association. "After subdued demand, we are getting reports of heavy footfalls at jewellery outlets over the past three days for jewellery and bar and coin purchases." Based on footfall reports from trade for the festive season, Mehta estimates a record 45 tonnes of gold to be sold this Diwali (18-23 October).