Glittering gold becomes dearer in capital Chennai

CHENNAI: Gold is glittering with an all-time high value. The rate of precious metal which was below Rs 43,000 per sovereign six months ago (before October 2023) is sold at more than Rs 53,000 in the market now. The sellers said that the rate would increase further in the following months. April and May which is considered as the marriage season in Tamil Nadu is also getting affected due to the high rates.

Industry sources confirmed that the retail sale is adversely affected in Chennai due to model code of conduct, but it is the online trade and wholesale trade by NRIs keeping the gold much in demand.

The rate on Wednesday per gram is Rs 6,670 per gram and the silver rate is Rs 89. The rate of gold per sovereign is Rs 53,360. Along with it ten per cent minimum making charges and three per cent GST is also added pushing the prices further, sources said.

"Ukraine and Russia war, Israel and Palestine wars and the downfall of the US economy in the market led to the increase in gold rate. In the future, the investments currently in fixed deposits will be made in gold. So the gold rates will also increase in future and will reach Rs 7,000 shortly. Gold will be a good investment in future also." said Jayantilal Challani, president of the Jewellers and Diamond Traders Association of Madras.

Sales have been less than 50 per cent due to election and model code of conduct. The wedding sale has not been affected as people are purchasing it due to necessity, he added.

After gold, the demand is high for silver which is another investment. Platinum and diamonds do not have a huge market in India due to their very low resale value. Also unlike gold, platinum could not be used for taking loans.

"Many people think that the sudden increase in the rate of gold is due to the elections, but it is due to the increased buying of gold by the central banks in China and Russia. For the past 15 days the rate of gold has increased around Rs 900 per gram and per sovereign around Rs 7,200" said A Aashish, Shree Jewellers, Nungambakkam.

Consumers also share how financial planning has been affected due to the current fluctuations in the market. R Sajini, a consumer said, "I kept Rs 2 lakh as savings for five sovereigns of gold to be purchased during the marriage which is in this month. Due to the recent spike in the gold rate, I am spending Rs 30,000 more to buy gold which affected my plans."

"The weak indices in the US stock market and less interest rate for cash deposits in banks are additional reasons for gold to be in demand. The traders in gold and government policy makers will make sure that the gold rate is not going down. Any further increase in tax or import duty will push the gold price further," said Shankar Raman, a goldsmith based in Central Chennai.