PNB fraud impacts gold sales in country, demand drops upto 20% over purity concerns
The PNB scam had badly impacted the sales of gold jewellery in the country. According to the traders, the sales have been fallen 15-20 per cent as buyers became cautious over the purity of the yellow metal.
The PNB scam had badly impacted the sales of gold jewellery in the country. According to the traders, the sales have been fallen 15-20 per cent as buyers became cautious over the purity of the yellow metal.
"Reports have come out that synthetic diamonds have been sold as original diamonds by the Gitanjali Group. This has created afear psychosis among customers who are enquiring about the quality of jewellery,” Nitin Khandelwal, chairman at All India Gems & Jewellery Trade Federation (GJF) told the Economic Times.
Surendra Mehta, national secretary at India Bullion & Jewellers Association, also confirmed to the publication that the decline in demand came after the PNB scam.
“However, we are hopeful the situation will begin to improve from the end of this month,” he said. “Our guess is that people will shift from diamond-studded jewellery to plain gold jewellery if hallmarking is made mandatory for all jewellers,” Mehta said.
Gold prices held steady on Thursday as investors awaited more details on US President Donald Trump’s proposed steel and aluminium tariffs, the outcome of the European Central Bank’s policy meeting, and US jobs data.
Spot gold rose 0.2% to $1,328.81 per ounce by 1.34pm. It hit a one-week high on Wednesday at $1,340.42, before closing lower at $1,325.49 an ounce. US gold futures were up 0.1% at $1,329.
“Gold is going to be choppy here and remain in rangebound trading ... It is finding some support in the downside around $1,300 levels due to safe haven demand,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Investors are also awaiting US non-farm payroll data due on Friday for more clarity on the pace of US rate hikes. Businesses are reporting persistent labour market tightness across the United States, with accelerating wage gains in many regions, the Federal Reserve said on Wednesday in a report that bolstered the case for interest rate increases.
“In the medium-term, gold will come under some pressure from interest rate hikes and will recover as it has done in the past,” Fung said.
The European Central Bank is all but certain to keep policy unchanged on Thursday but may tweak its communication stance to offer at least a few clues about its progress towards ending its unprecedented bond purchases later this year.