While high prices act as a headwind, the gold buying has picked up in a big way in the country, says PR Somasundaram, Managing Director India at World Gold Council.
“Buying has resumed in a big way. But the price is still high; it is around Rs 38,200-38,300 which is quite stiff as compared with what we saw 6 months ago or during the last Diwali. But compared to what we saw during the Pooja festival where there was a complete despondency, now it looks like consumer footfalls have increased and the marketing activity is quite robust,” he told CNBC-TV18.
Somasundaram says Indian imports will be on the lower side as the recycling activity has jumped tremendously, which is to be expected at these prices. "In the last three quarters, imports are just about 40 percent of what it was during the previous quarters and we are talking about the gross imports. We certainly will come out with net export figures in the next couple of days, but even the gross imports are just 40 percent of what we saw. So we expect imports to be lower because recycling will be higher, and demand is also not as high as we originally expected,” he noted.
Talking about higher gold prices going forward, he pointed out that the consumers are very positive about the future of gold price in the next few quarters. "This will act as a good incentive for consumers to buy at whatever price -- whether it is Rs 38,000 or 37,000 -- it does not matter because you are expecting the trajectory to be higher,” he said.