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Local demand up as gold rates ease, grey market more active

27 November 2020

 

Falling gold rates have led to an increased retail buying in the local markets, say traders. There is a higher demand in the grey market where unaccounted transactions happen as against the official channel, say sources.In the grey market, gold is at Rs50,800 a tola (per 10 grams). In the legal trade, the rate is Rs49,400, which comes to a little over Rs50,900 after adding the Goods and Services Tax (GST). Sources say couple of days ago the grey market prices had even surpassed the official rates by a couple of hundreds, touching Rs50,900.

 

This clearly shows that as the global prices of gold are falling, there is a demand locally. The number of buyers is more in the grey market where dealings happen in cash and no tax is paid. This is because the grey market and official rates are neck to neck. There have been times when the former’s rates were higher than the latter, said sources.Global prices of the yellow metal have eased following good news about vaccines being developed for Covid. As the local markets follow the global trends, the rates are down at home too.In last four days, gold prices have fallen by Rs1,600, touching Rs49,500 a tola. Silver has eased by Rs2,000, touching Rs61,000 a kg in the market here.

 

Traders say that the retail buyer is looking to cash in on the opportunity. The fall in rates also coincides with the marriage season. Traders too accept that demand is higher in the grey market.

The situation is similar for silver as the rates in grey market and officials channels are almost the same, say traders. The official rates of silver are in the range of Rs60,500 to Rs61,000, which comes to over Rs62,000 after adding GST. Grey markets too are quoting over Rs62,000 for one kg of silver.Rakesh Rokde of M/s Rokde Jewellers, who also heads the Nagpur Sarafa Association said, “There has been an increase in gold buying, especially after the rates have gone below Rs50,000 a tola.” Rajkumar Gupta of Pooja Jewellers at Itwari in Nagpur said that easing of rates and marriage demand has spurred buying.

 

Source: https://timesofindia.indiatimes.com/city/nagpur/local-demand-up-as-gold-rates-ease-grey-market-more-active/articleshow/79434111.cms

 

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