Stock Market

Indians return to physical gold, jewellery preferred pick: Pros

Indians have resumed stocking up gold this Diwali with most investing in physical gold, particularly jewellery say industry experts.

In a CNBC-TV18 special show – Dhanteras Gold Rush – Mithun Sacheti, Founder & Ceo of Caratlane.Com, RK Sharma, COO at PC Jeweller,  PR Somasundaram, Managing Director of World Gold Council, Robin Bhar, Head Of Metals Research- Global Markets at Societe Generale, Sanjeev Agarwal, CEO, Gitanjali Export Corporation, and Pravin Shankar Pandya, Chairman of GJEPC share their view on the safe haven metal.

Bhar believes it is safer to buy physical gold now as it helps diversify portfolio considering there are a number of global risks and uncertainties looming and other conventional assets are richly valued and might head for a correction.

Bhar, however, does not expect gold to give staggering returns. A 10-15 percent increase in prices is likely, and that should be fairly decent considering interest rates in some countries is close to zero, he says. He expects prices to stabilise around USD 1,350-1,400 per ounce.

Heads of local jewellery majors say people have returned to investments in jewellery more than coins and bars and preference is also shifting from traditional gold to diamond jewellery and newer metal variants like Lumineux Uno that is a mix of gold, silver, platinum and palladium but available at nearly one-twentieth the price of gold.

According to Agarwal of Gitanjali, the industry which had suffered a setback in the first few months of the year following protests over the additional tax announced in the Budget, has bounced back and is likely to more than recover the lost business in the remaining part of the year.

Pandya of GJEPC notes not only domestic sales but exports too have picked up significantly over the last couple of months.

Online retailers that had for the past few years missed out on the Diwali action have seen good participation this year. Sacheti of CaratLane says Sacheti, CEO of CaratLane there is a definitive shift seen in purchasing preferences with organised sector finally getting a dominant share over family jewellers.

Watch video for more.