Indians Keep Buying Gold in Off Season
Indians aren’t deterred by a slump in the gold price. Even in their gold “off season,” Indian jewelry and gold stores continue to sell the yellow metal unabated.
Neither finance minister P Chidambaram, nor the fear of a bad investment is deterring people from buying gold. In fact, the sharp dip in prices has only brought more customers to jewellers though some are waiting for gold to slip even more.
Dismissing the minister’s plea to refrain from buying gold for the next few months, people are giving in to the lure of the yellow metal. ‘This is off-season for us but sales continue to be normal,’ said Alok Bhattacharya, store manager of B.C.Sen Jewellers in Gurgaon. With a few months to go before the onset of the wedding season, when gold sales gain momentum, sales should be mostly stagnant now. ‘Some people are unaware of the dip in gold prices and the possibility of a further dip (which could lead them to postpone purchases). So, our sales have not been affected,’ said Ajay Bali, store manager of Tanishq, Gurgaon.”
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I don’t think that with the way the dollar index is fluxuating that it is unreasonable to think that gold will rise to 1,350 an ounce or even 1,400.
While fluctuations in gold prices might not be as volatile as local currencies, the value of gold always stabilizes over time. Never forget that gold reserves are diminishing each year and this makes this precious metal gain value overtime. I think this is one understanding that investors should not overlook, and especially when it buying gold for long term profits.