Homepersonal finance News

    Akshaya Tritiya 2020: How will gold perform this festive season?

    Akshaya Tritiya 2020: How will gold perform this festive season?

    Akshaya Tritiya 2020: How will gold perform this festive season?
    Profile image

    By Anshul   IST (Updated)


    Purchase of gold is considered auspicious on this day.

    Akshaya Tritiya, the summer festival of India, is associated with wealth and prosperity. Purchase of gold is considered auspicious on this day. However, the sentiment this year will be different as the entire country is under lockdown due to the coronavirus outbreak.
    While direct sale from jewellery shops may not possible, online platforms may see traction, say experts. Many digital wallets and gold outlets have come with products like online gold and gold certificates. Jewellers have also come up with several other innovative ways to sell gold online amid the coronavirus lockdown.
    Despite this, industry mavens believe that gold sale will remain subdued this festival season.
    “Since gold is an international commodity priced in dollar, any depreciation in rupee leads to a further rise in prices of gold. The value of the yellow metal has surged over 40 percent in the last one year alone,” says Nish Bhatt, Millwood Kane International.
    Prices in April last year were around Rs 32,000/33,000 per 10 grams and currently they are around Rs 46,000 levels.
    “Domestic jewellery demand has seen a significant drop given the rise in prices through the last financial year. The biggest impact to hit demand (including exports) has been the COVID-19 crisis,” explains Shekhar Bhandari, Senior Executive Vice President & Business Head – Global Transaction Banking & Precious Metals, Kotak Mahindra Bank Limited.
    Buying gold in country like India is driven by sentiment and that is why the demand for gold generally rises during days like Dhanteras or Akshaya Tritiya which also leads to increase in price.
    "However, keeping the returns in the equation this year, this doesn't appear to be a good time for buying gold," explains Pranjal Kamra, CEO, Finology.
    Last year around 33 to 35 tons of yellow metal was sold during Akshaya Tritiya, according to Anuj Gupta, DVP–Commodities & Currencies Research, Angel Broking.
    “In last two months, the import of gold in India has plunged more than 73 percent year on year basis. In the month of March 2020,  India just imported 25 tonnes of gold against around 94 tonnes last year,” he adds.
    Gupta believes that there will be no physical demand in gold this Akshaya Tritiya, owing to lockdown and higher price of the yellow metal. However, other options for buying gold like gold ETFs, sovereign gold bonds (SGBs) and gold coins may see some traction.
    "SGBs are good for long-term investment, tax-free on redemption and will enable Indians to continue with the practice of buying gold on auspicious occasions like Akshaya Tritiya," adds Amit Patni, Director, Campden Family Connect.
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    arrow down

      Most Read

      Market Movers

      View All