February 25, 2021

New coronavirus wave causes 35% dip in sales at Asia’s largest gold market

2 min read
New coronavirus wave causes 35% dip in sales at Asia’s largest gold market

The new wave of coronavirus led to a 35% fall in sales in the past week in Mumbai’s Zaveri Bazaar, Asia’s largest gold market, from where 65% of all gold trading and dealing in India is estimated to originate, said bullion dealers and jewellers.

The daily turnover of Zaveri Bazaar is usually close to Rs 900 crore, they said.

“Since the number of Covid cases are rising in Maharashtra, people are staying at home and are coming out only when necessary. This has impacted sales at Zaveri Bazaar by 35% in the last one week,” Surendra Mehta, national secretary, India Bullion & Jewellers Association, told ET.

Amid increasing cases of Covid-19, the state government has imposed strict restrictions on people’s movements but stopped short of announcing a lockdown. Restrictions have been imposed across cities such as Amravati, Mumbai, Nagpur, Pune, Pimpri Chinchwad, Nashik, Aurangabad, Thane, Navi Mumbai, Kalyan-Dombivli, Akola, Yavatmal, Washim and Buldhana.

Mehta said the falling gold prices have failed to attract consumers. The market was expecting that a reduction in import duty on gold to 7.5% from 12.5% announced in the Union Budget would spur demand. “But in reality, demand did not witness a huge spurt,” he said.

Bullion dealer Prithviraj Kothari, who operates from Zaveri Bazaar, said it is very difficult to maintain social distancing in the area as lanes are narrow and shops are located close to each other. “We are constantly asking people to remain aware of the situation as Covid is yet to leave the country,” he said.

However, as vaccine roll-out gathers pace, sales at Zaveri Bazaar too will pick up, he said.

On Tuesday, gold traded steady on COMEX, with spot gold prices quoted about $1,808 per ounce. Gold April future contract on

traded flat near Rs 46,836 per 10 grams by noon session.

Gold prices witnessed recovery on weaker dollar and pandemic worries. Traders and investors said they were focusing on US stimulus hopes and US Federal Reserve chairman Jerome Powell’s testimony later in the day.

“We believe this is the right opportunity for investors to invest in gold as prices are in correction mode for the short term at least till March-end,” said Tapan Patel, senior analyst (commodities) at HDFC Securities. “The spot rupee has rallied more than 3% against the dollar from the lows seen in November 2020. The strength in the rupee may keep upside limited in gold prices for the near term.”

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