Gold rate in Chennai sees slight dip after rally; jewellers await Akshaya Tritiya to spur sales

CHENNAI: The gold rally has now hit a speed breaker with the price of the yellow metal recording a marginal dip. Industry experts say that the rate of gold will increase once again when the Akshaya Tritiya season boosts sales.

On Monday, the rate of gold per gram was Rs 6,610 while per sovereign was Rs 52,880.

Almost a month ago, the rate of gold was Rs 6,670 per gram and per sovereign was Rs 53,360.

"There is a decrease in the rate of gold compared to a few weeks ago but the rate will increase again in the days to come. The fluctuations in rate are due to geopolitical conditions globally and are not affected by any events that are happening in India. All the issues that affect the rate are due to the world economy and other issues," said Jayantilal Challani, president of the Jewellers and Diamond Traders Association of Madras.

Sources from the industry opine that the current decrease is a trend that usually happens before an increase in the rate. The rate of gold will reach Rs 7,000 per gram in the near future, they predicted.

Although gold sales are less at present, jewellers hope for it to pick up with Akshaya Tritiya falling on May 10. "When the price of gold became high with a gram going for Rs 6,700, sales too became high because customers expected the rate to increase again and hence invested in gold more. But as the rate decreased, the expectation of the customers that the rate will decrease, has also decreased," said Suresh Kumar of Sri Sumangali jewellery, Nungambakkam.

Meanwhile, Challani said that there is a high chance for an increase in the rate of silver. "Silver was mainly sold in the market by China but recently, they reduced the production, so the chances for an increase in the silver price is high," he predicted.