Gold demand muted even as jewellers' strike ends

Gold demand was less than expected onMonday when the bullion market reopened after the 21-day strike, jewellerssaid.

"We expected the demand to be very high as the shopswere closed due to the strike. However, the footfalls were much fewer than ourexpectations," Kumar Jain of Umedmal Tilokchand Zaveri said.

Gold on Monday closed at Rs 27,985 per 10 grams, up by Rs 90compared to the Saturday's close of Rs 27,895.

The demand will definitely go up as the marriage and festiveseason is round the corner which will boost sales, but we expect it to pick upgradually, he added.

Jewellers in Indiaended their three-week strike on Friday after assurance that the governmentwould consider scrapping a budget proposal to levy excise duty on unbrandedjewellery.

Although trading restarted on Saturday at the bullion marketin Mumbai, most jewellers in Maharashtra couldnot open shops as they participated in a pre-scheduled rally.

Bombay Bullion Association President Prithiviraj Kotharisaid the subdued demand is due to the lack of liquidity in the market.

"The demand is slow because there is no liquidity inthe market," he said.

City-based PM Shah Jewellers' Dinesh Jain said, "Theresponse is positive and we are expecting 20 per cent more footfalls as thewedding season is about to begin".

This trend is likely to continue till after 'AkshayaTritiya' (April 24), considered an auspicious day to buy gold.

However, Kolkata's Nemichand Bamalwa & Sons' BachharajBamalwa said the demand there has been very high mostly in wedding relatedjewellery since they opened shops on Saturday.

"Looking at this trend, we expect 15-20 per cent moredemand than last year. As the wedding season is about to begin, people arepurchasing ready-made jewellery as there is no time for bookings,"Bamalwa, who is also the chairman of All India Gems and Jewellers TradeFederation (GJF), said.

Jewellers across the country had gone on strike from March17 to protest the budgetary proposals of levying excise duty of 1 per cent onunbranded precious jewellery and doubling customs duty on standard gold bars,gold coins and platinum to 4 per cent.

Bullion traders and jewellers called off the strike lastweek after meeting UPA Chairperson Sonia Gandhi and Finance Minister PranabMukherjee, who assured them to look into their demands.