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Merchants Prepare for India’s Akshaya Tritaya Festival

Release Date: 
Monday, April 23, 2012

Gold prices moved lower today on a higher dollar and lower euro with gold trading at $1631.50 per ounce at 7:44 AM Pacific Time on the New York Spot Market and silver trading at $30.78 per ounce.

Concern that France's socialist party may win the presidential election has raised concern over whether the French-German coalition will continue amid Europe's continuing debt crisis. Spanish and Italian bond yields were higher because of this concern despite a positive meeting of the International Monetary Fund (IMF) and World Bank. The IMF will receive an additional $430 billion to help support economies affected by the euro zone debt crisis.

In India, markets were preparing for rising gold demand from the Akshaya Tritiya festival on April 24 with extended trading hours and special incentives during the holiday. "The day of Akshaya Tritiya in India has been traditionally considered very auspicious for purchasing gold, silver, ornaments, precious stones, real estate and other long term assets," said Religare Broking CEO Gagan Randev said. Any new venture or asset creation initiated on this day is thought to invoke good luck, growth and prosperity.

Rahul Singh, marketing head of Shree Ganesh Jewelry House, said the demand for gold jewelry and coins has already picked up. "The long shutdown has compounded the consumer demand," he said, referring to a three-week strike by India's jewelry shop owners in protest of a government tax.

"We expect business to soar and hope sales would be around 25% to 30% more than last year," said All India Gems and Jewelry Trade Federation Chairman Bachhraj Bamalwa.

ANZ issued a report stating that the price of gold may rise to $1,740/oz. by the end of the second quarter.

(Source: "PRECIOUS METALS: Gold In Tight Band In Asia; Fed Meeting In Focus," Wall Street Journal, April 23, 2012; "PRECIOUS-Gold slides 1 pct as oil, stocks, euro fall," Reuters, April 23, 2012; "PRECIOUS-Gold hovers around $1,640/oz; eyes on Fed meeting," Reuters, April 23, 2012; "Gold Declines as Stronger Dollar Curbs Investor Demand," Bloomberg, April 23, 2012; "Indians charging up for tomorrow's gold buying festival frenzy," MineWeb, April 23, 2012; "Markets gear up for Akshaya Tritiya,", April 22, 2012)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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