In Delhi, gold glitters at record 31,035/10g

Yellow Metal Rallies On Bullish Global Cues New Delhi: Gold price hit a record high of Rs 31,035 per 10 grams on Thursday, deepening concerns of a slowdown in the demand for the yellow metal at home. With consumer buying already in the red due to an uncertain economic scenario, the rise in price has come as a double whammy for jewellers and traders amid tepid demand. In Mumbai too, gold surged to an all-time high of Rs 30,515.      High inflation leading to a negative buying sentiment has marred purchase of gold —both in investment and jewellery form. Most consumers have postponed their purchases, especially around a time when the industry expected a surge in sales.      Analysts say gold prices have rallied to fresh highs on the back of bullish cues in the overseas market. International prices rose in anticipation of a fresh round of fiscal stimulus by the Federal Reserve. By late Thursday evening, gold neared $1675 an ounce in the international market — the highest price since April 13.      Although the precious metal is still some distance away from reaching an all-time high globally, in India the spike has been sharper as the rupee has depreciated considerably over the last 12 months, making imports more expensive. "People have moved from dollar to precious commodities causingprices to surge. With international price increasing and the rupee remaining stable, this is going to impact domestic demand pretty badly," said Gnanasekar Thiagarajan, director Commtrendz Research, a research firm. Even with the festival season around the corner, the steep increase in price of gold has led jewellers and traders to reduce their growth targets for the current quarter. While industry watchers expect some buying to continue, it will remain restricted only to consumer needs.      The increase in price of gold has already dampened sales target for branded jewellery retail chain Orra. While price increases always momentarily impact consumer buying attitude, surpassing the 30,000 barrier point will lead to signs of slowdown, Orra CEO, Vijay Jain said. Though the retail chain is expecting buying mood to return to normal around Diwali, the company is not expecting growth to be as robust as last year. "This is a major concern for us. First, buying sentiment is not so positive, and now this price rise has compounded the problems for the industry. It will come as a shock to the consumers. It might take some time before buying becomes steady again," Jain said. A customs duty of 4% has also added to the price pressure. Sales were significantly hit during last quarter when jewellers protested the implementation of a 1% excise duty, which was later withdrawn. "There are multiple things that are affecting the demand for gold right now. Our business has been impacted due to the duty hike and then due to poor monsoons. The price rise will further postpone any pick-up in demand," said N Balaji, general manager, MMTC.      Analysts said it might take some time for demand to shoot up again as consumers will take time to adjust with the increased price.